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Tech Industry

Gates dodges tough questions

The Senate's hearing on computers and competition shows how high-tech executives, like politicians, share a penchant for sidestepping difficult questions.

WASHINGTON--While important issues on industry competition were raised at today's Senate Judiciary Committee, perhaps most illuminating was how Bill Gates and other high-tech executives share the fabled politician's penchant for sidestepping difficult questions.

Facing unprecedented scrutiny in recent months, See special coverage: Face-off Microsoft--and particularly its CEO--have gained a reputation for responding indignantly to antitrust concerns of journalists and federal regulators.

When asked here yesterday if pressure from the Justice Department played a role in the company changing the wording in contracts it signs with U.S. Internet service providers, Gates balked. The government's antitrust action, he said, "has nothing to do" with the ISP contracts.

Gates was speaking the truth, of course, but he failed to acknowledge news that he had known for some time and that the world had learned only a week earlier: A number of ISPs had been subpoenaed over the contracts.

In a front-page interview run in today's Washington Post, Gates bristled at the mere mention of the word "monopoly," calling some questions "dishonest" and "unfair."

At the Senate hearing, Gates could hardly afford to alienate some of Washington's most powerful legislators. Still, while he was courteous, on numerous occasions he avoided answering difficult questions. When asked if Microsoft was a monopolist, for instance, Gates tended to talk about the lowering prices of software and the growth of the industry, without once addressing his company's 90 percent share of the operating system market.

The high-tech industry is unique, "a market where no one can restrict output." He added that products are conceived, marketed, and buried "in the span of a senator's" term, he said. "No company owns the factory for ideas."

On a separate query--asked no fewer than half a dozen times--Gates repeatedly dodged central issues. The line of questions concerned whether the software giant limited its content partners' ability to promote products made by Netscape Communications. Instead of answering, Gates reiterated that partners were free to develop exclusive content for Microsoft competitors.

Further complicating the proceedings was the presence of people who hold an intimate understanding of the computer industry, including venture capitalist Stewart Alsop of New Enterprise Associates, who defended Microsoft on a number of issues.

But unlike rushed press conferences where tough questions that go unanswered are quickly replaced by new ones, today's hearing was different. Committee members had the time and tenacity to press issues they felt were not being addressed to their satisfaction.

Hatch also appeared to have done some homework. The senator quizzed CEO Michael Dell of Dell Computer, who also was at the hearing, over why his company did not offer non-Microsoft browsers on its computers, even though Netscape holds a larger share of the browser market.

"I was surprised to learn that [Dell] does not offer consumers the option to load Netscape on PCs," Hatch said.

Gates, however, proved a worthy sparring partner. Asked point-blank by Hatch whether his company held a monopoly, the CEO did not give a direct answer. Instead, Gates discussed competition in the marketplace that could displace the software giant's market position in the future.

"Outside of this room and even members of this panel, you will hear how products will replace Windows, how Java will supersede Windows, how the browser will turn into an operating system...You'll hear from IBM on its plans for operating systems, so there is competition," he said. "If your question is, 'Can any Microsoft product endure future competition, anything we offer today?' the answer is absolutely no."

Hatch tried again: "So your testimony is that Microsoft, with more than 90 percent of the market for personal computer operating systems, does not have a monopoly on the market and that the established [antitrust] rules do not apply?"

The Microsoft executive's reply: "I'm not going to say anything about legal issues. I'm not an expert."