Microsoft: Looking Forward
by Rohit Malik

On November 12, 2002, the AEI-Brookings Joint Center hosted a forum featuring Microsoft CEO Steve Ballmer. In his first extended public remarks since a settlement of the Microsoft antitrust case was approved, Mr. Ballmer outlined the relationships the company plans to pursue with its customers, the government, and other players in the information technology industry in the wake of this landmark ruling. After applauding the settlement as the "fairest and best way to resolve the case," Mr. Ballmer said that he was optimistic about future relations between Washington and computing industry leaders like Microsoft.

Mr. Ballmer outlined Microsoft’s plan to meet its obligations pertaining to the settlement, citing the formation of an Antitrust Compliance Committee by Microsoft’s board of directors as a preliminary step. The committee is chaired by Dr. James Cash of Harvard Business School, who serves along with Ann Korologos, a former Secretary of Labor, and Ray Gilmartin, the CEO of Merck. Moreover, he noted that Microsoft had already taken steps to meet its obligations under the settlement, disclosing information about Windows that will facilitate interoperability and altering contracts to meet the court’s standards. Finally, he elaborated on what he had learned from the legal contest.

Collaboration is needed in the coming decade, not only within the information technology industry, but between industry and government. In particular, Mr. Ballmer emphasized the need for cooperation with regards to online privacy, security, and reliability. He argued that the private sector must coordinate efforts with the public sector to deter cyber crime at its source, to curb illegal "spam" e-mails, to help parents manage the way their children use the Internet, and to close the digital divide by funding programs like Boys and Girls Clubs and the United Negro College Fund.

The questions following Mr. Ballmer’s remarks reflected the audience’s concerns about privacy and security, as well as Microsoft’s commitment to meeting its obligations under the settlement. With respect to online privacy, Mr. Ballmer stressed that government involvement needs to be tempered to reflect the rights of those who do business on the Internet to make their own choices. On the question of Microsoft’s role in enhancing cybersecurity, Mr. Ballmer argued that Microsoft was increasing its level of spending on security technology and expected to make major advances in assuring the integrity of its products.

Finally, with regard to Microsoft’s ability to remain competitive while complying with its settlement obligations, Mr. Ballmer noted, on "the face of it, I don’t actually find much of a contradiction there. The settlement gives us a framework under which we understand how to provide the kind of openness and technical disclosure… that addresses issues the government has had with where we’ve been. But at the same time it lets us continue to do innovative work, add new capabilities into our Windows products, and generally try to put absolutely the best offer we can in front of customers around the world."

Rohit Malik is a research assistant with the AEI-Brookings Joint Center for Regulatory Studies.