Microsoft's Brad Smith Says the Company's Antitrust Case Provides Lessons for Facebook
At the Code Conference, Microsoft's CLO said that Facebook's current situation has parallels to his own company's turn-of-the-century antitrust battles.
May 30, 2018 at 03:34 PM
3 minute read
The original version of this story was published on The Recorder
Last week, Facebook CEO Mark Zuckerberg faced antitrust concerns from European Union parliament members, in a Brussels meeting addressing the platform's privacy and targeted ads post-Cambridge Analytica.
It's not the first time an American tech company has come under antitrust scrutiny, at home or abroad. Microsoft president and chief legal officer Brad Smith told Recode's Kara Swisher on Tuesday that Facebook's current situation has parallels to his own company's antitrust battles in the late 1990s.
United States v. Microsoft began in 1998, when the Department of Justice sued Microsoft for allegedly stamping out competition to uphold a software monopoly. Microsoft decided to fight the case, which dragged on until a settlement in November 2001.
“The truth is, if we had worked things out in 1998, we might well have been able to work [the issues] out well before it became the antitrust version of nuclear war, literally trying to break the company up,” Smith said at the 2018 Code Conference. ”You've got to solve problems when they're small enough to be solved and you've got to do that early.”
Smith said companies like Microsoft and Facebook should seek compromise where possible, rather than fight antitrust and other concerns in court.
In its case, Microsoft argued that Windows was not a monopoly instead of addressing antitrust concerns immediately, a move Smith said he regrets.
“[It was] the worst argument to make because what people were fundamentally saying to us is look, you have a responsibility. You have a responsibility that comes with this market share and what they heard us saying [in response] is no we don't,” Smith said.
He said that part of Microsoft's decision to fight stemmed from a lack of awareness about their own power and perception in the market, a challenge similar to the one Facebook has faced in recent years.
Smith warned that Facebook and other major tech players need to be aware of their switch from small startups to large, influential companies with responsibilities to users and the general public.
“There comes a moment in time when you're not the startup anymore,” he said. “And you have to recognize when that moment comes, and you have to be prepared to shift, you have to mature, you have to listen, you have to build relationships and you have to compromise.”
The Microsoft CLO also spoke against tech companies quick to criticize Facebook's handling of the Cambridge Analytica scandal and other recent troubles. Smith recalled similar criticisms of Microsoft during the suit. He said that tech companies should instead offer each other support during crises, because they'll all face them.
“No one should ever assume that somehow [their company has] it all worked out and are never going to have difficult days,” he said. “I think that Facebook is working through a very challenging situation and the rest of us need to work through our own challenging situations. This is not a world where one or two companies have challenges and the rest of us do not.”
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