June 28, 2007 1:47 PM PDT

Microsoft to Google: Take an antitrust lesson from us

BOSTON--A Microsoft attorney says the company has learned how to deal with antitrust regulators and that Google could glean a thing or two from the experience.

Marshall Phelps, corporate vice president and deputy general counsel, said that if Microsoft had negotiated sooner with the U.S. Department of Justice, it might have avoided further trouble. The company has had a running battle with regulators for more than a decade, and in 2002, it signed a landmark settlement with the federal government that called for more stringent oversight of the company's practices.

Marshall Phelps Marshall Phelps

"Had Microsoft been a little quicker to give in on this, that and the other, (it) wouldn't be in the same pickle," Phelps said.

Phelps, who spoke at the Red Herring East conference here, said "one of the problems companies get into (is) when they don't realize how powerful they are and how powerful they are perceived as being." He then directed his comments at Google, one of Microsoft's main rivals in online search and applications.

"Google is going to face the regulatory burdens that Microsoft faced. It's going to be legislation by bad example. Something awful is going to happen, and legislators will run off and draft something that deals with privacy issues," Phelps said.

Phelps had some suggestions for companies facing antitrust regulators.

"Discretion is the better part of valor, and it's better to be a bit more humble in the face of regulators because they are never going to go away," Phelps said. "I don't care how many good lawyers you have or how much money. The regulators still win. That's just the rule. All the more reason you want to be cooperative and make the government think they won. You want to say, 'Yep, you won. We'll change our practices.'"

Microsoft is following that advice, changing its own practices and "desperately trying" to make regulatory peace with the European Union, Phelps said.

Google may not agree with Phelps' statement. The company recently filed a complaint with a federal judge, arguing that changes Microsoft has agreed to make in its Vista operating system fall short of addressing concerns that its computer search function puts Google and other potential competitors at a disadvantage.

But Google was rebuffed, at least for now, by the federal judge presiding over Microsoft's antitrust compliance. Judge Colleen Kollar-Kotelly said she didn't plan to comment on that filing and deferred to government regulators to alert her if they decide that Microsoft does, in fact, need to make more changes than the ones they already agreed to implement.

CNET News.com's Anne Broache contributed to this report.

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11 comments

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It should say
"MS has learned how to manipulate regulators"

MS has not changed its spots.
Posted by qwerty75 (1164 comments )
Reply Link Flag
You think that quote was bad?
What about this one!

"All the more reason you want to be cooperative and make the government think they won. You want to say, 'Yep, you won. We'll change our practices.'"

Sheesh!
Posted by cameronjpu (178 comments )
Link Flag
Didn't AT&T do the same thing???
Didn't AT&T settle too just before the government was going to order it to be broken up so that they could control what got split and what didn't.... I thought I read somewhere for example they spun off all the bells but kept the infrastructure so that the bells had to lease much of the long-haul telecom equipment from Ma-Bell in the early years.
Posted by JCPayne (820 comments )
Reply Link Flag
Sounding noble
This SEEMS like a noble gesture towards Google. But did Microsoft even wonder WHY the regulators were looking into their case? Perhaps because MS did something (many things) that are harming the consumers in the long run? And competition in both the short run and long run?

They make regulators sound as though they are somehow unjust. The government retains regulatory power for a reason (but what the current administration does, and how/if the Judge toes that line are an entirely different story).
Posted by justice007 (13 comments )
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Definitely. Google is getting too powerful
As much as we like to think Google is the best, they're not.

Have you heard of some recent things about Google, especially on privacy? Do I want Google to take my cookies, and take some info. on me? Let them monitor my Gmail account? Make some bits of me public for the world to see?

Google Books steals publisher content and publishers have to opt-out, which isn't really nice. Windows Live Books asks publishers to get their content, instead of swiping them without permission.

Google goes to court about Vista's desktop search. Vista Desktop Search is already fine, and even greater than Google's desktop search. Plus, do I really want Google's bloatware on my computer indexing my computer, and probably keeping track of them in Google's servers? I don't think so. It's just ridiculous. You could say the same for OS X's Finder.

That's just the tip. Google is starting to become the big bad boy that Microsoft used to be. At least Microsoft is the one to get out of it, hopefully, one day Google can too.
Posted by quikboy2 (95 comments )
Reply Link Flag
Microsoft Could Learn a Thing or Two From Google
From the story. "A Microsoft attorney says the company has learned how to deal with antitrust regulators and that Google could glean a thing or two from the experience. "

That may be true, and yet, Microsoft sure could use a lesson or two on how to treat customers right.
Posted by Renegade Knight (13748 comments )
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