Bill Gates Explains Why Microsoft Must Take a Stand in DOJ Case

Bill Gates Explains Why Microsoft Must Take a Stand in DOJ Case

REDMOND, Wash., Feb. 2, 1998 — Microsoft Chairman and CEO Bill Gates said today in a letter to Microsoft’s 25,700 employees and 1 million shareholders that the company is taking a firm stand in its case with the Justice Department to protect the ability of Microsoft and thousands of other American software companies to compete and to create innovative products that benefit consumers.

Gates also said Microsoft will step up efforts to explain to the American public, to customers and to government policy-makers the role Microsoft has played in creating one of the most competitive and innovative industries in the world today, and the benefits this has brought to millions of people at work, at school and at home.

“People have asked me why Microsoft is taking such a strong stand in our case with the Justice Department over our right to integrate Internet technology into the Windows operating system,” Gates said. “My answer is that a vital principle is at stake: whether Microsoft and thousands of other American software companies will continue to be free to create software that benefits consumers.

“I have immense respect for the authority of the government and the role of the American judicial system, and would like nothing better than to put these disagreements with the government behind us. That’s why we recently settled the issue of our compliance with a preliminary injunction.”

But Gates said the Justice Department’s attempt to force Microsoft to remove Internet functionality from the Windows® 95 operating system goes to the heart of the company’s ability to compete and to create innovative products.

“My goal has always been to create software that improves the quality of people’s lives, so it’s disappointing for me to see the government now try to put controls on an American success story,” he said. “The computer software industry today does not need this type of government intervention. It is one of the healthiest, most competitive and innovative segments of the American economy.”

Gates noted that the software industry is growing at two-and-a-half times the rate of the U.S. economy overall, contributes more than $100 billion a year to the nation’s economy, and employs over 600,000 Americans, more than double what it did just eight years ago. Since 1990, the number of U.S. software companies has doubled to more than 44,000, and investment in new technology companies is at an all-time high.

Gates said Microsoft has played an important role in fostering this competition and innovation by creating an open platform, the Windows operating system, on which tens of thousands of companies can freely innovate. This has resulted in more product choices, which has benefited consumers in the form of lower prices and better features and performance.

Gates said Microsoft’s continuing integration of Internet features into Windows is a logical, incremental step in the evolution of the operating system. “For more than 17 years we have consistently built new functionality into our operating systems, just as our competitors have enhanced theirs,” he said. “People sometimes forget that Microsoft didn’t inherit Windows. We bet the company on it and invested billions of dollars creating and improving Windows, testing compatibility and working closely with hardware and software partners. It has become so popular because it offers consumers the best combination of high performance and low price.”

Gates said fierce industry competition means that Microsoft has no guaranteed position in the operating system business. “That’s why we’ve continually added new features and functionality and kept prices low. It’s also why we have more than tripled our research-and-development expenditures on Windows in the last six years. If we don’t continue to advance Windows, some other company will quickly replace us,” he said.

The full text of Gates’ letter is posted on the Internet at .

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

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