Microsoft Gambles on ‘Nice Guy’ Strategy to Close Activision Megadeal

Microsoft is trying to strike a balance between, on the one hand, seeming open to a settlement and, on the other, preparing to destroy the F.T.C.’s case in court. It has hired Beth Wilkinson, who prosecuted the 1995 Oklahoma City bombing case before becoming one of America’s premier corporate litigators, to argue on its behalf before the F.T.C. in-house court.

Mr. Smith said he was optimistic that the case could avoid a messy trial, in part because of Microsoft’s previous experiences with antitrust enforcement.

In the 1990s, the company was known for its scorched-earth business tactics, bundling software products together to edge out competitors. In 1992, as regulators investigated the company, the Microsoft co-founder Bill Gates dismissed the scrutiny, saying, “The worst that could come of this is that I could fall down on the steps of the F.T.C., hit my head and kill myself.”

Two years later, Microsoft agreed to a federal consent degree allowing personal computer makers more freedom to install programs from other companies. It staved off being broken up after a 1998 antitrust trial, and finally settled with the George W. Bush administration in 2001.

“The trial forced Microsoft to grow up, particularly in terms of its relationships with regulators and institutions beyond the tech industry,” said Margaret O’Mara, a professor at the University of Washington who researches the history of tech companies.

In 2001, Mr. Smith walked into interviews to be Microsoft’s top lawyer with a message: It was time to make peace with regulators and competitors. He got the job. Over the next several years, he reached legal settlements over competition concerns with governments around the world and other industry players.

Article source: https://www.nytimes.com/2022/12/22/technology/microsoft-activision-strategy.html