Dow Jones Says Its Microsoft Contract Story “Substantially In Error”

Dow Jones Says Its Microsoft Contract Story “Substantially In Error”

REDMOND, Wash., Oct. 28, 1999 — After Microsoft Executive Vice President and Chief Operating Officer Bob Herbold sent a letter to editors at the Dow Jones Newswire bringing to light facts that were omitted from the newswire’s Oct. 20-21 article regarding an alleged provision in a contract with Microsoft, Dow Jones today corrected its story — saying that it was “substantially in error.”

Dow Jones issued the following correction today:

Dow Jones News Service via Dow Jones

An article published by Dow Jones Newswires Oct. 20 and repeated Oct. 21 about language in Microsoft contracts was substantially in error. The article incorrectly stated that a clause contained in more than one Microsoft contract addressed how contracts would be assigned if a judge ordered the breakup of Microsoft. The contract in question was a draft contract between Dow Jones & Co. and Microsoft Corp. Dow Jones Newswires is not aware of other Microsoft contracts or drafts with such a clause, and Microsoft says there are none.


Microsoft Sets the Record Straight on Inaccurate Dow Jones Story

REDMOND, Wash., Oct. 25, 1999 — An October 20th Dow Jones newswire story contained inaccurate and misleading information about Microsoft and the company’s business contracts. Microsoft is calling upon Dow Jones to retract the story and provide a full explanation of the highly questionable events that led to the story.

Specifically, the story titled, “Microsoft Contracts Have Unusual Antitrust Breakup Clause,” erroneously claimed that Microsoft was inserting language into its business contracts related to a hypothetical antitrust breakup of the company. The first paragraph of the story claimed “this time, Microsoft’s lawyers may have gone too far.” A briefer story, based on the Dow Jones report, also ran in some editions of The Wall Street Journal on October 22nd.

Simply put, the entire premise of the article is false. As Microsoft told the Dow Jones reporter before and after his article appeared, we are not aware of any Microsoft contracts that contain the clause cited by your reporter, or any similar clause related to the hypothetical antitrust breakup of the company.

After further investigation by Microsoft, it appears that the reporter’s source for this inaccurate and inflammatory story was a draft contract between Dow Jones itself and Microsoft, for the provision of Dow Jones news services to Microsoft. The clause cited by the reporter was inserted into the contract by Dow Jones attorneys — either deliberately or as a result of a misunderstanding — not by Microsoft. Moreover, the clause had been specifically rejected by Microsoft as inappropriate and unnecessary after it was added by Dow Jones. And, contrary to implications of the Dow Jones story, the draft contract between Microsoft and Dow Jones has never been signed by either party.

Microsoft is troubled that such an inaccurate and potentially inflammatory story was ever published. Microsoft Chief Operating Officer Bob Herbold has written to Dow Jones requesting a public retraction of the story, an apology to Microsoft and Dow Jones’ subscribers, and a full explanation of how this unfortunate incident ever occurred.

In addition, the fact that a draft legal document being negotiated between Microsoft and Dow Jones was apparently shared between the Dow Jones business and news divisions raises serious potential ethical and professional issues.

Microsoft regrets any confusion that this inaccurate and misleading Dow Jones story may have created.

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