Microsoft Ships Python Code... in 1996
python-history.blogspot.com
python-history.blogspot.com
Sounds like it was a direct competitor to Viaweb.
1) It was an acquisition. Didn't Google also have C# when they acquired Writely? Don't think it was advertised much either.
2) Python is a language. Eventually that get's compiled down to probably native C instructions at that time, right? Probably not like it was an open-source module distributed in violation of a license?
What I like though was how the author and Microsoft did to "get it shipped."
Also, programs written in Python are not subject to Python's licensing terms so there's no violation there. That would only happen if they modified the interpreter itself.