Intel-Microsoft Vistagate, Part 1
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News Analysis. How serious could be Intel's and Microsoft's mutually beneficial, apparent collusion over Windows Vista and integrated graphics chip sets? Criminal. |
This morning, I asked Eric Goldman, a law professor at Santa Clara University School of Law, if there might be violations under the jurisdiction of the Federal Trade Commission, Justice Department or Securities and Exchange Commission.
"Yes, to all of the above," he answered. "Maybe, we haven't exhausted the universe of possible problems here."
Quick recap of this week's events: As part of the discovery process for the Windows Vista Capable lawsuit, on Wednesday the court publicly disclosed 158 pages of internal Microsoft documents. On page 30, unidentified Microsoft employee John Kalkman writes in an e-mail about Vista certification for an Intel chip set: "We lowered the requirement to help Intel make their quarterly earnings so they could continue to sell motherboards with the 915 graphics embedded." Later, after explaining some of the negative market results, he admits: "It was a mistake on our part to change the original graphics requirements."
Goldman hadn't yet reviewed all the released documents, when we first spoke. Clearly stunned, he asked me to reread the Kalkman quote about Microsoft helping Intel earnings.
The statement is "very serious" if straightforward as it appears, "with life-changing consequences for the individuals involved," he emphasized.
Later, after becoming more familiar with the case, he e-mailed and expressed how news stories "shockingly haven't been getting into the legal consequences."
Goldman emphasized: "These emails are certainly germane—and problematic for Microsoft—in the consumer lawsuit against Microsoft. However, they also seem to suggest a number of other potential legal risks—both civil and criminal—that Microsoft, Intel and some of their employees could face."
Today, Intel spokesman Chuck Mulloy told me that "John Kalkman has no idea what internal Intel financial or forecasts might be for chip sets, motherboards or any other products. The statement would be entirely speculation on his part."
At first glance, Mulloy has refuted the e-mail. But not really. He didn't deny that there was any discussion or arrangement between the companies about the 915 chip set. I told him that the statement wasn't a denial.
"In this world of financial disclosure, we don't share that kind of information," he responded.
But that's no denial either. I can imagine many ways where either Intel or Microsoft could pressure the other company or together reach a mutually beneficial agreement without ever violating SEC disclosure rules.
Microsoft's response, e-mailed at my request and attributed to spokesperson David Bowermaster, admits one thing as nondenial of the other:
"We included the 915 chip set as part of the Windows Vista Capable program based on successful testing of beta versions of Windows Vista on the chip set and the broad availability of the chip set in the market. Computers equipped with this chip set were and are capable of being upgraded to Windows Vista Home Basic. Microsoft authorized the use of the Premium Ready designation on PCs that could support premium features of Windows Vista."
As I will explain in the follow-up post, OEMs weren't united with Microsoft's decision. Dell and HP both raised concerns about the decision-making process regarding the 915 chip set.
Bowermaster dismissed the e-mail's significance, without directly addressing any possible Intel-Microsoft discussion or agreement regarding the 915 chip set and Windows Vista certification.
"The internal emails released by the plaintiffs actually have little to do with their claims," he asserted. "The emails reflect just part of an active internal discussion about how best to implement the Windows Vista Capable program."
Unquestionably, there are pieces of the discussion missing from the disclosed documents. The Kalkman e-mail refers to attachments related to the "decision process and initial outcome with HP." But that discussion appears to be OEM dissent about a questionable decision.
I'm not surprised by the responses by either Intel or Microsoft. What, are the companies going to just up and admit wrongdoing, assuming there was any (and in fairness there's too much missing information to say with certainty)?
That said, neither company has yet issued an out-and-out denial. The statements don't put an end to the story—or controversy.
"With the nonresponse you got, the issue continues to fester, continues to look like a problem," Goldman said.
Related Posts:
- Intel-Microsoft 'Capable' Confusion, Microsoft Watch, Feb. 28, 2008
- Vista: One Year Later, Microsoft Watch, Nov. 8, 2007
- Broken Windows, Microsoft Watch, Aug. 9, 2007
- Were Vista Capable Stickers Incapable?, Microsoft Watch, Aug. 8, 2007
- Retail Windows' Dim Vista, Microsoft Watch, July 23, 2007
- It's Not Ultimate Enough, Microsoft Watch, July 2, 2007
- The Vista Contradiction, Microsoft Watch, June 4, 2007
- How Does Windows Vista Rate?, Microsoft Watch, May 20, 2007
- Windows ME II, Microsoft Watch, April 25, 2007
- The Trouble with Windows Vista Capable, Microsoft Watch, April 4, 2007
- Recent Lawsuits Target Vista, VOIP, Microsoft Watch, April 3, 2007
- When Vista Shifts into Low Gear, Microsoft Watch, Dec. 7, 2006
Comments (10)
"and in fairness there's too much missing information to say with certainty"
Um, a little late for fairness now that in this and former posts, you've publicly tried and convicted them, isn't it Joe?
Posted by Bob | February 29, 2008 6:40 PM
Tried and convicted...? Don't think so, or at least it doesn't come across that way to me.
Interesting to see what will happen though...
Posted by whatever | February 29, 2008 9:25 PM
Yikes Man!
You take one man's internal email, which is as yet to be determined to be in any way valid, or based upon anything of substance, and outright convict both companies - criminally!
Are you nuts?
"Certified for Windows Basic" which the 915 most certainly CAN run.
The case is about what people may have interpreted when presented with Windows Vista Capable and all material around that logo program supports Microsoft.
I'd be dang careful if I were you.
What, Microsoft and Intel, because they are successful companies are no longer entitled to due-process?
I won't be back by here until they unload you and hire someone with some sense.
Posted by H3 | February 29, 2008 10:18 PM
Well, Joe, I don't like to throw things out there before you get a chance to post on them but this one is significant. Not trying to steal your thunder and all, just busting to tell somebody what happened and, well, heck, here goes:
Microsoft's OOXML has lost a crucial vote at the ISO conference which was attempting to move the Office XML format through a fast track process.
Given the number of dispositions to be discussed and the three day opportunity available, the body felt it could not adequately discuss and debate the issues about the OOXML specification in the time given.
So, now, OOXML is doomed to a reprobate hell where the 6000 words of the specification are going to be poked, proded and dissected and God only knows what kind of skeletons are buried within that body of code narrative.
Discovery might be the word most unanticipated by an organization that prides itself on eating its own dogfood but obviously never considered what's going to happen when somebody's bold enough to shove something decidedly not pate' up under their nose. And, having been an electronic media monolith, there is decidedly some electronic discovery to be made no doubt.
Not to mention the new discovery software available to feret where no human team could have gone before.
So, in the battle of the humans against the machines, MSFT wants to keep the MSFT software strictly in the hands of humans while all the other technologies run rings around that buggy whip factory.
Microsoft has demonstrated to the world they simply don't know how to deal with the brave new XML world Bill Gates swore Microsoft would "own".
It looks like what they own is an infrastructure that can't get on online (when will hotmail be mended? and why?), a "standard" that's not going to be used as an interoperable platform in Government contracts, large regulated businesses, fortune 500's or any outfit that has to legally account for the validity of machine handled documents.
Governance by automation is impossible without a well crafted XML infrastructure. And Microsoft's fat and lazy attitude toward a technology and a world they didn't understand so did not deign to learn has wrought nothing to look at in the future for the average Softee as befits proper XML web work.
So, Ballmer's brilliant strategy for dealing with MSFT's intellectual property deficits has been to not only keep a tight noose around the proprietary legacy of Microsoft code and kept data, but, to cut off working with machines and keep the PCs in the hands of "the people".
Meaning the world of the internet is about to discover the processing wonders of automation as enabled by virtualization and empowered by arbitration.
All the while Microsoft works as hard as IBM ever did at holding the line from falling into that "futurist hobby fad" of PC Programming and PC Programs.
The PC is today's mainframe. The mainframe of yesterday is tomorrow's PC. The cycle is miniaturization in the hardware and excalating the usability of the coding ecology.
But, first, you have to have the right architecture and Microsoft's dead end soiree's into SOAP and UDDI and all the other horridly "programmed" myopic ideas.
Sure they work. Sure they did the job. But, they do not excel at the job and they do not make the most uses of the available resources.
The Ballad of Bubula "Big Bulb" Ballmer in the key of Gee. Flat.
Microsoft has bought the farm. Laid an egg and lost an arm. Talk the Farmer from the loft, and pass the ax.
When you can not do but harm, stay in bed all comfy warm. Cash the checks and watch TV. And pay your tax.
Some folks can and some folks cain't. Doesn't mean your heart is faint. It just means that good you ain't. And you should go.
When the govmint asks you why all their all all done ran dry tell them you ain't in the biz of their complaint.
When the 'vestors aks you why gave them doodoo in their eye. Tell them that it tastes like pie from where they ain't.
Posted by pedro panza | February 29, 2008 10:39 PM
How can a blogger convict someone criminally? The way i interpret this article is
"If his is what happened then the ramifications are >"
Posted by whatever | March 1, 2008 12:40 AM
H3 wrote: "Yikes Man!"
Part 2 looks at the other e-mails. Nothing here hangs on "one man's internal e-mail."
Thanks,
Joe
Posted by Joe | March 1, 2008 12:41 AM
Intel is the biggest manufacturer of graphic chips, well ahead of nvidia and ati (thanks to their mobo-integrated chips), it's not surprising that they care a lot about them.
Helping intel should not be punished, what should be punished is harming other companies.
Posted by Diego | March 1, 2008 6:37 AM
H3:"I'd be dang careful if I were you."
"I won't be back by here until "they unload" you and hire someone with some sense."
------
It seems a threat (The MS' Mafia?)
Posted by Marco | March 1, 2008 8:53 AM
H3: What's Windows Basic? Just curious.
Pedro: you made a typo - it's 6000 PAGES, not words - I'm sure you know and are just as appalled as I am.
Posted by Kattemann | March 2, 2008 6:59 AM
Hi Joe, great articles - honest and to the point. As another stung customer I feel a bit upset by the whole saga and now that the lawyers are doing their usual subterfuge its good to get some insight from you. Lets hope some common scense pervails and this type of confusing PR (corporate tidily winks) is stopped and perhaps we see some fix (I bet its possible).
And to those like H3. get real get a life and use your name!
Posted by Darren | March 5, 2008 9:00 PM