Mr. Smith Goes to Washington

Aaron Tilley, Wall Street Journal:

[Brad] Smith, a Microsoft veteran of almost 30 years and president for seven, has maneuvered his company to an enviable position in a regulatory environment that is increasingly hostile toward tech titans. Once an antitrust pariah itself, Microsoft is now widely seen by regulators as the friendly party among today’s top tech companies, a status government officials and Microsoft insiders say flows largely from Mr. Smith’s cultivation of friends in Washington.

Rivals say he is also skilled at directing negative attention toward competitors — to Microsoft’s benefit.

I am sure Smith’s experience at Microsoft in the late 1990s and early 2000s gave him a valuable perspective on how to adapt to antitrust and oversight concerns, and it sounds like the company really is changing in key ways. But Tilley’s reporting indicates Microsoft evades scrutiny mostly because of Smith’s close friendships with lawmakers. Not so mysterious, is it?


Mr. Smith’s strategy has been to cooperate with regulators who often have Microsoft’s rivals in the crosshairs. He has criticized Apple’s operation of its App Store — as Microsoft tries to bring its “Netflix for gaming” service to the iPhone. He has supported measures to cut into Facebook and Google’s dominance of digital advertising — which could benefit Microsoft’s search and digital-ad businesses. His support of tech-sector regulations has cut against efforts by Amazon, Microsoft’s fierce rival in cloud computing, to fight constraints on its business practices.

So long as regulators do not look too closely at which operating system every computer in their office runs on, where their email comes from, or how everything works together without any real alternative choices, Microsoft seems free to complain about how its revenue streams are not entirely dominant in every market it participates in.