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Ballmer: "Dedicated" to court settlement

In his first public remarks on the long-running antitrust case, Microsoft CEO Steve Ballmer says the company will meet settlement guidelines set down by a federal court.

WASHINGTON--Microsoft CEO Steve Ballmer said Tuesday that the software giant was "dedicated from the top down" to meeting settlement guidelines from a federal antitrust ruling against the company.

Ballmer's speech marked the first public remarks from a company executive about the antitrust case and its impact on the Redmond, Wash.-based software giant. The CEO spoke at an event held at the Brookings Institute here.

Ballmer described the settlement as "a fundamental part of what's different" at Microsoft. The antitrust rulings put "new obligations, responsibilities" on the company, he said.

The "settlement was the fairest and best way to resolve the case...We are committed to full compliance," Ballmer said.

U.S. District Judge Colleen Kollar-Kotelly approved a settlement deal Nov. 1 between Microsoft, the Justice Department and nine states and imposed a modified version of the settlement as her remedy for litigation continued by nine other states and the District of Columbia.

Many legal experts expect the ruling to be the final major legal action in the case. The nine litigating states have 30 days from Kollar-Kotelly's ruling to appeal. But none is expected to change the ruling, nor do many legal experts anticipate the states would try.

Meanwhile, Microsoft moves ahead with business under new obligations established by the settlement. On Friday, the company announced it had created a compliance committee, as required by the court. Separately, the Justice Department, Microsoft and nine states filed a revised settlement with changes requested by the judge.

Ballmer repeatedly emphasized the importance of cooperation throughout his speech. He spoke about "a new management approach" that focuses more on customer and partner relationships. Microsoft Chairman Bill Gates "and I run a very different organization than we did five years ago," he said.

Microsoft apparently learned much from its four-and-a-half year antitrust battle with the government. Ballmer noted that Microsoft found few supporters at the beginning of the case, which surprised company executives.

"We've learned a great deal over the last few years about our own responsibility," he said. "We learned we needed to take a different perspective on being an industry leader."

Ballmer made clear that the company would now work to "foster industry cooperation in new and different ways."

The antitrust case and uncertainty over how to proceed in the wake of the dot-com boom took a toll on Microsoft, which struggled in 2000 and much of 2001 to formulate a coherent product strategy. But following the release of Windows XP in October 2001 and an early 2002 decision to largely scrap its ambitious .Net My Services strategy, Microsoft appeared to be climbing again.

In a retreat from aggressive tactics that led the government to bring the antitrust case in the first place, Ballmer said that Microsoft has focused on building technology upon which other companies can build products.

Partly motivated to woo companies to the .Net strategy, Microsoft earlier this year started more aggressively courting developers with new incentives and tools, such as Visual Studio .Net. This focus on working with partners is part of Microsoft's renewed focus on cooperation.

"We are working to be a more responsible leader for our industry," Ballmer said. "Last week's Tablet PC launch was about years of partnership."

Microsoft's CEO spoke strongly about a new era of cooperation that would make technology better and easier to use.

"I want to talk about the future," he said. He asked the audience to think about what the world will be like 10 years from now. "I think we will do more in the next 10 years than the past."

Microsoft will increase research and development spending by 15 percent to $5 billion this year, Ballmer said.

"As a company looking forward, we see enormous potential." He predicted that through technology innovation, we will "achieve this promise of truly personal computing."

A reunion, of sorts
Brookings' Robert Litan and Robert Hahn of the American Enterprise Institute (AEI), who are co-directors of the AEI-Brookings Joint Center for Regulatory Studies, introduced Ballmer.

The venue was an interesting one for Ballmer. During the height of the antitrust trial, when U.S. District Judge Thomas Penfield Jackson weighed, issuing an order breaking up Microsoft, Litan advocated splitting the company into four companies--or "baby Bills."

Jackson later issued an antitrust remedy ordering Microsoft to split into separate operating systems and software applications companies. But an appeals court overturned Jackson's order.

"It's somewhat odd I'm doing the introduction (of Ballmer)," Litan said. The former antitrust litigator also participated in an earlier, 1994 settlement between the Justice Department and Microsoft.