Microsoft’s Amazing Chutzpah

Last Friday, when U.S. District Judge Thomas Penfield Jackson decided to delay the first phase of his verdict in the Microsoft antitrust case, I wondered how the hiatus affected the personal comfort level of one William F. Gates III. For all anybody knows, Gates may be such a cool customer that he is not worried in the least about the outcome. After all, Microsoft’s extraordinary wealth and past track record have many believing that the outcome is merely a formality.

However, some industry observers feel that Gates and company may be in for a big surprise, directly related to the amazing chutzpah the company has displayed outside of the courtroom.

Lobbying War

For instance, the latest issue of Business Week reports that for more than a year, Microsoft has been waging a lobbying war against the Justice Department.

The software giant hired some of the top Washington lobbyists to persuade Congress to deny the Justice Department Antitrust Division’s request for a budget hike.

According the report, this move stunned even some of the most hardened Washington insiders. Others pointed out that Microsoft is unlikely to score many points with the department’s top bureaucrats by trying to undermine their ability to function.

The bottom line is that in 1998, Microsoft ranked 68th on the nonpartisan Center for Responsive Politics’ list of lobbying spenders. During that year, the company shelled out $3.7 million (US$) to Beltway lobbying firms in an attempt to fight the government.

Recruiting The Stockholders

To add even more political pressure to its bare-knuckle campaign against the Justice Department, Microsoft has also been enlisting the help of its millions of stockholders and partners.

In a letter and mail-in card sent with two million copies of Microsoft’s new annual report, stockholders were invited to join the “Freedom to Innovate Network.” Members of this Microsoft-backed organization are encouraged to write to Congress and to speak out in their respective communities about “policies that will affect America’s ability to continue to lead in the information age.”

Microsoft officials have easily justified this action by simply saying that the company does not want its business partners and investors to be left out of the debate.

Will Hardball Tactics Get Desired Results?

At the beginning of the trial, when it became clear that the government was going to seriously pursue an antitrust case against Microsoft, talk of a kinder, gentler Bill Gates quickly evaporated.

Instead, Microsoft seemed to make a conscious decision to throw hard punches right in the government’s face.

Personally, I think Gates may have miscalculated the effect, and his company could be the one to end up with a bloody nose. History shows that when governments are threatened directly, they immediately hunker down and fight back.

I believe that this Friday, Microsoft will find that all of its hardball tactics have backfired when the full wrath of the bureaucracy finally falls on its head.

What do you think? Let’s talk about it.

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