Dell Embroiled in Senate Hearing Over Microsoft Tie

Strategic Insights -

The Senate Judiciary Committee, chaired by Senator Orrin Hatch (R-Utah), questioned Michael Dell, founder and chairman of Dell Computer Corp., on his company's relationships with Microsoft Corp. during a hearing in Washington. Dell's visit aimed to support Bill Gates' defense of Microsoft's market dominance, but the CEO found himself on the defensive as senators inquired about Dell's reluctance to ship computers with Netscape's Internet browser, an alternative to Microsoft's Internet Explorer.

Key Takeaways:

  • Dell's sales representatives refused to ship a computer loaded with Netscape's Internet browser, citing a licensing agreement with Microsoft.
  • The company's arrangement with Microsoft requires Dell to use Internet Explorer software, despite having the capability to install Netscape.
  • A Dell representative, Jason, told committee staff that he personally preferred Netscape to Internet Explorer but was unable to include it in a system.
  • Dell stated that his company would provide Netscape if a large customer demanded it, but did not elaborate on this claim.
  • Michael Dell claimed that "all vendors offer incentives" when questioned about his company's deal with Microsoft.
  • The Senate hearing highlighted concerns about the competitiveness of the personal computer software industry and the dominance of Microsoft.

Statistics:

  • Five Dell sales representatives (George, Brad, Jason, Bobby, and Jeff) informed committee staff that Dell could not distribute Netscape's Internet browser.
  • Dell Computer Corp. is the nation's No. 3 computer maker.
  • The company has a licensing agreement with Microsoft that requires the use of Internet Explorer software.

Sources:

  • AUSTIN AMERICAN-STATESMAN
  • Bloomberg News