Microsoft Plays The ‘Nice Guy” Strategy to Close Activision’s Megadeal

Microsoft reached a federal consent agreement two years later that gave personal computer users more freedom to use programs from other companies. After a 1998 antitrust trial, it was saved from being disintegrated and settled in 2001 with the George W. Bush administration.

Margaret O’Mara, an academic at the University of Washington, who studies the history of tech companies, said that Microsoft was forced to mature after the trial.

Smith entered interviews in 2001 to become Microsoft’s top-ranking lawyer. He had a message for the judges: It was time for peace with regulators. He was offered the job. He reached several legal settlements with various governments and industry players over concerns about competition over the following years.

The FTC commissioners voted 3-1 in favor of suing the day following

It wasn’t always easy. It took over a year for negotiations between Microsoft and Sun Microsystems to come back on track. Sun Microsystems is a server company that created the Java programming language. Steve Ballmer was Microsoft’s CEO in 2004. He was flying to Brussels to announce a contract with the European Commission. Smith received news that the commission was going to sue Microsoft. It took five years for a deal to be reached.

Microsoft has taken a more open approach to its business since Nadella assumed control. He acquired the Minecraft studio, which is a game that allows children to interact and learn in a virtual world. He also spent $7.5 Billion to purchase GitHub, a platform that allows open-source code.

Microsoft is the second-most valued public company in the world, thanks to its cloud computing capabilities. It is generally less attention to the enterprise business that drives its growth than other consumer-facing ventures or social media.

Smith has presented Microsoft to the world as a friendlier giant that is willing to work with skeptical legislators. Smith has supported bipartisan interests, such as expanding broadband and proposing middle ground rules for contentious issues like app stores.

Smith has strong relationships with Washington. He was a bundler for President Joe Biden’s campaigns and attended a White House state meal for French President Emmanuel Macron, just days before Activision was blocked by the FTC.

Microsoft took great measures to calm regulators’ fears after the deal was announced in January. Nadella and Smith visited Washington in February to highlight the benefits of the deal. The company made peace with an angry labor union which in turn lobbyed the FTC for the deal. It also promised Sony it would keep Call of Duty for many years on PlayStation and signed a deal with Nintendo to make the game available on Nintendo’s Switch.

Smith stated that “things happened quickly” during the last weeks before Microsoft was sued. He stated that it was clear that FTC staff had serious concerns when they met with Microsoft’s employees.

“Our team asked, “Could you discuss a settlement proposal?” And the staff replied, “Not with us,” he said. He said that later discussions with the antitrust bureau leadership of the agency failed to yield any results.

Microsoft submitted a formal settlement proposal to the agency on Dec. 6. Smith refused to reveal the exact contents of the proposal, but stated that it addressed “all issues relating Call of Duty”, referring to the possibility that Microsoft might take the title from other consoles. Smith spoke virtually for one hour with each of the four commissioners of the agency the next day.

Smith stated that he did not see the situation as one between us and them. He said, “I will always ask myself if I could have done more.” “What I do know, however, is that January brings with it a new year.”