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Tuesday, 9 November, 1999, 23:57 GMT
Microsoft steps up lobbying efforts
Capitol Hill: Microsoft funded 115 federal candidates in 1997-98

By the BBC's Kevin Anderson in Washington

Microsoft is working to win in the halls of Congress and the court of public opinion to help minimise the potential damage of any adverse ruling in the government's anti-trust case.

The software industry, known for its 70-hour working week, has long considered itself too busy to bother with politics. But as its profits and profile have risen, the software industry, and Microsoft especially, have woken up to Washington.

Courting Congress

"We recognised we were a little late to the game," said Microsoft spokesman Rick Miller, but added that the company believed it needed to counter negative publicity by its competitors.

Microsoft's presence in Washington began small, with a staff of one in 1995.

But staff numbers have grown to 10 this year. In terms of campaign contributions and lobbying efforts, Microsoft has greatly increased its investment.

Microsoft nearly doubled its lobbying budget from 1997 to 1998 - to $3.74m - according to the company's lobbying disclosure documents.

In October, Microsoft lobbied heavily to defeat a budget increase for the Justice Department's anti-trust division, the department responsible for bringing the case against the company.

The effort did not boost its public image.

The Washington Post wrote: "The effort by Microsoft to get the proposed budget of the Justice Department's anti-trust division slashed fits a comical caricature of the thuggish company that Microsoft's enemies believe the software giant to be."

Microsoft's lobbying efforts have hardly been restricted to matters related to the anti-trust trial.

"They have lobbied of the same issues the computer industry has lobbied for," said Holly Bailey, spokesperson for the Centre for Responsive Politics, a group that tracks campaign finance issues.

The company has lobbied Congress for tax relief, for stronger intellectual property protection and for a greater number of visas for foreign high-tech workers.

Microsoft has also greatly increased its contributions to political candidates.

In the mid-term elections of 1998, the company contributed almost $1m to candidates in 1998. That was up from $235,000 in 1996 and $106,000 in 1994.

The company has consistently been the top contributor among computer companies, and Microsoft has contributed six times more during the same period in the last election cycle, giving more than $800,000 in total political contributions, Ms Bailey said.

Microsoft made many contributions to members of the judiciary committees in both the Senate and the House of Representatives.

These members of Congress would have the most direct influence over the Justice Department.

"But it's hard to say what they have got for their money," Ms Bailey said, and she added: "It's hard to say what Congress can do with this antitrust case. But it certainly won't hurt them to have more friends on Capitol Hill."

But James Love, with the technology watchdog group the Centre for Public Technology, said Microsoft's efforts are "an aggressive attempt to change government".

Just as Microsoft perceived Netscape as a threat, and "that is pretty much how they approach the government, as a threat," Mr Love said. The increased lobbying efforts and campaign contributions are only part of a multi-pronged strategy Microsoft has to deal with this perceived threat from the government, he said.

They have established "phoney grass-roots groups" and hired people to write opinion pieces for newspapers and magazines and to pose as ordinary citizens in various Internet chat rooms, he said.

They have also enlisted their stockholders and business partners to lobby for them, and "they have sponsored polls to make it appear they have a groundswell of support," he added.

But Microsoft's political and public relations efforts are only part of a larger trend in the high-tech industry, and many of Microsoft's competitors have also increased their political efforts.

In a case of duelling industry groups, Microsoft and its competitors have established and funded industry organisations to lobby for their case.

Motivating factors

Microsoft competitors Sun Microsystems, Netscape and Oracle established a competing group called the Project to Promote Competition and Innovation in the Digital Age, simply known as ProComp.

Before the anti-trust trial began, ProComp strategic adviser and former presidential candidate Bob Dole called on the Justice Department to expand its anti-trust probe of Microsoft.

The activities of Microsoft's competitors in Washington were one of the motivating factors for the company's greater political involvement.

"We had seen a lot more involvement of our competitors in this area. They were defining who Micorosft is. They were there [in Washington], and they were there strong," Mr Miller said.

And as Congress considers an increasing number of bills involving the high-tech industry, hardware, software and Internet companies will only see more reason to increase their political presence.

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