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Subject: His Firm Facing Antitrust Probe, Microsoft Executive Stumps for Clinton<By
Date: Fri, 30 Oct 92 04:28:31 EST
Message-ID: <51.1992Oct30.042831@AmeriCast.com>

His Firm Facing Antitrust Probe, Microsoft Executive Stumps for
Clinton<By John Burgess=Washington Post Staff Writer=

 The Oct. 20 letter to computer software executives in the Pacif-
ic Northwest was a straightforward call to support the Clinton-
Gore ticket. What caught the attention of some of the recipients
was the name of one of the two men sponsoring the appeal: Steve
Ballmer, executive vice president of computer software titan Mi-
crosoft Corp.  Microsoft has long had a reputation for steering
clear of politics. Its billionaire co-founder and chairman, Wil-
liam Gates, has not tipped his hand about which ticket he would
like to see win next Tuesday.

 Microsoft itself, based in Redmond, Wash., is the subject of an
18-month-long  investigation by the Federal Trade Commission into
whether the company has violated laws of fair competition in its
rise to prominence in the nation's $7 billion-a-year market for
personal computer software.

 Microsoft denies any wrongdoing.  Advisers to Democratic
presidential candidate Bill Clinton have said that a Clinton ad-
ministration would reduce the burden of regulation on U.S. com-
panies where possible, and would review current investigations as
part of a general examination of how antitrust law affects the
global competitiveness of U.S.  firms. The FTC's investigation of
Microsoft would naturally come under such review, the advisers
said.

 Ballmer said in a telephone interview that there is no connec-
tion between the FTC probe and his political activities, which he
described as "strictly personal."  He said he had never met or
talked with anyone from the Clinton campaign.  Ballmer said he
was recruited to support the Clinton-Gore ticket by another
software executive.

 Ellis Mottur, a Clinton campaign official who is a liaison to
the business and high-technology community, also denied that
there was any link. "We would never discuss something like that,"
he said. Any action that a Clinton White House would take would
be "done within a framework of what's good for an entire indus-
try," not for one company, said Mottur.

 Ballmer said he was acquainted with vice presidential candidate
Sen. Al Gore (D-Tenn.), whom he met while serving with Gore on
Harvard University's board of overseers. His personal respect for
Gore is another reason for his support, he said.

 Earlier this month, Ballmer introduced Gore at a cocktail fund-
raiser and wrote a $2,000 check to the Democratic campaign.

 The Democrats recognize that "there is a need to catalyze change
in the way the economy works," Ballmer said.

 In the letter, Ballmer and Tom Bruggere, chief executive of Men-
tor Graphics Corp. of Wilsonville, Ore., pronounced themselves
"impressed" with the technology policy of the Democratic ticket.
The executives called for further attention in the race to the
special concerns of software companies, such as copyright protec-
tion for software programs.

 As a result of the letter, about 35 software executives agreed
to put their names on a list of Clinton-Gore supporters. Ballmer
also was co-chairman of another group that rounded up 100 busi-
ness executives from the Northwest to support Clinton.

 Ballmer said his participation does not imply endorsement of the
Democrats by Microsoft or its chairman. "We are an apolitical
company ...," Ballmer said. "We try to run our business and focus
our efforts there."

 In Ballmer, the Democrats have acquired a forceful promoter, a
gregarious charter member of the youthful team that became
wealthy as they built Microsoft into a world presence. He blos-
soms before crowds and cameras - for screening at an industry
conference, he once made a gag video in which he played a late-
night TV pitchman for the company's popular Windows software pro-
duct.

 For some executives who received the Oct.  20 letter, the names
of Ballmer and Bruggere at the bottom implied the participation
of their companies.

 "I'm not used to seeing either of those companies take an ac-
tivist stance," said David Kellerman, president of Northlake
Software Inc. of Portland, Ore. "Our high-tech industry has been
pretty passive."

 But despite that reputation, Microsoft has been active in Wash-
ington policy-making for years. Though it does not have a full-
time government affairs executive here, it frequently sends peo-
ple from headquarters and works with hired lawyers, members of
the Washington state delegation in Congress and trade associa-
tions here to make its positions known.

 The company has a small political action committee to which
Gates, Ballmer and other Microsoft executives have contributed.
As of Oct. 20, the Federal Election Commission had received re-
ports of $3,500 in donations by the committee to the election
campaigns of Sen. Slade Gorton (R-Wash.) and six Democrats in
Washington state and other states.

 Gates has personally given $500 to  Gorton's campaign chest and
$1,000 to that of Sen. Brock Adams (D-Wash.), according to com-
mission records.

 If the Clinton administration does review the FTC's probe, it
would be stepping into a long-running Washington debate: Have
federal laws on competitive practices become outdated in a global
economy in which foreign companies may be freer to work hand-in-
hand?

 When the FTC investigation was first disclosed early in 1991, it
provoked groans from some quarters that the U.S. government was
beating up on a great American business success story in a key
industry of the future: computer software.

 Microsoft is by far the largest personal computer software com-
pany, with sales of $2.8 billion in its last fiscal year. It em-
ploys 12,000 people.



As a matter of policy, the FTC neither confirms nor denies wheth-
er it is investigating individual companies. But officials there
say that the best way to keep U.S. companies fit for the frays of
the international marketplace is to make sure they have competi-
tive pressures at home.

 Industry sources believe that the investigation hinges on wheth-
er Microsoft has used its clout in operating systems to unfairly
bludgeon competitors, through actions such as unfair pricing to
get customers to favor Microsoft.

 William Neukom, Microsoft's vice president for law and corporate
affairs, said the company was cooperating by providing documents
and arranging interviews by FTC investigators with Microsoft em-
ployees.

 "We don't think we have done anything that violates antitrust
laws," he said.

02:34 10-30C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

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