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November 20, 2008 2:23 PM

Plaintiffs argue why Ballmer should be deposed in Vista Capable suit

Posted by Benjamin J. Romano

Another set of documents unsealed in the Windows Vista Capable class action lawsuit lays out the plaintiffs' arguments in favor of deposing Microsoft CEO Steve Ballmer, something the company has opposed on the grounds that he "has no unique personal knowledge of any facts at issue."

Their argument, laid out in this 14-page PDF, centers on a phone call Ballmer received from Paul Otellini, CEO of Intel, on Jan. 30, 2006. That's the same day that Microsoft dropped a requirement in its Windows Vista capable program that would allow millions of computers using a certain Intel chipset to be labeled "Vista Capable," preserving sales for Microsoft, Intel and PC manufacturers that may otherwise have evaporated as consumers waited to purchase PCs until the launch of Vista.

Plaintiffs state:

"In connection with Microsoft's critical January 30, 2006 decision, and on that same day, the CEO of the world's largest chipmaker (Intel) called the CEO of the world's largest software company (Microsoft) to discuss the billion-dollar-plus loss that Intel faced if Microsoft were unwilling to make changes to its Vista Capable program. Despite the near-panic atmosphere within Intel at the time, Microsoft would have the Court believe that the telephone call between [Otellini] and [Ballmer] amounted to nothing more than a 'courtesy call.' But this was not a spur-of-the-moment interaction between the two CEOs. Mr. Otellini had been planning the call for a week or more and insisted on making it happen to 'close the deal.' What did Mr. Otellini say? Why had the issues escalated so far? How did Mr. Ballmer react? What did he say? The only way for plaintiffs to know the answers to these and other questions is to ask the participants on the call."

They're asking for a maximum three-hour deposition that could be done early in the morning "allow[ing] Mr. Ballmer to be back in his office before lunch."

While the deadline for discovery in the suit passed on Nov. 14, U.S. District Court Judge Marsha Pechman could rule on the deposition of Ballmer and extend the deadline for this purpose.

In early October, Microsoft filed for a protective order stopping plaintiffs from deposing Ballmer.
16-page PDF In it, the company's lawyers argued:

"Mr. Ballmer had no involvement in the details of the Windows Vista Capable program. In 2006 Mr. Ballmer had brief discussions about technical requirements and timing for the Windows Vista Capable program with executives from Microsoft s business partners, including Intel. Those discussions took place at a general level. Based on those discussions, Mr. Ballmer relayed the concerns of Microsoft's business partners (such as Intel) to members of Microsoft's management (such as Messrs. Allchin and Poole) responsible for making decisions regarding timing and technical requirements. Mr. Ballmer did not direct Mr. Allchin or Mr. Poole to reach any particular business decisions in response to those discussions; instead, Mr. Allchin and Mr. Poole remained responsible for making and executing those decisions. Mr. Ballmer's knowledge of those decisions is entirely derivative and duplicative of Mr. Allchin's and Mr. Poole's knowledge."

While much attention is focused on the Ballmer-Otellini call, Microsoft points out that decisions around the Vista Capable marketing program had been made before the call took place.

Renee James of Intel, discussing the need for a conversation between the two top executives with her opposite at Microsoft, Will Poole, noted:

"So, he [Otellini] wanted to talk to Steve -- his prerogative. We didn't think he needed to as we have a final answer thus didn't ask for an escalation. But, he believes that when we agree to disagree -- he and Steve committed to tell each other."

More e-mails in support of the plaintiffs' arguments were also unsealed: 48-page PDF.

Intel's James had asked Microsoft to stick to its original schedule for beginning the Vista Capable marketing program in June. Microsoft had changed the date to April 1 in part to accommodate retailers' schedules.

Instead of sticking to the original date as Intel asked, Microsoft decided to drop Windows Device Driver Model requirement of the Vista Capable program -- a change that would allow computers using Intel's 915 chipset to be marketed as Vista Capable. The change would help the entire PC industry clear out soon-to-be-obsolete inventory in 2006. The concern was that consumers would wait to buy PCs until Vista launched Jan. 30, 2007.

Apart from the Otellini conversation, plaintiffs argue that Microsoft's position on Ballmer's involvement with the Vista Capable program is "fundamentally at odds with the record."

"Mr. Ballmer met with industry analysts, talked to the media, and held conferences and private meetings with OEMs, retailers, and others who had concerns about the program," Plaintiffs state.

Plaintiffs cite examples in which an executive at Best Buy scheduled a meeting between one of its senior executives and Ballmer to discuss the retailers concerns over the Vista Capable program, and a communication between Hewlett-Packard CEO Mark Hurd and Ballmer in 2007. Hurd complained about HP's "call lines being overrun" with customers difficulties upgrading to Vista.

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