Microsoft tells judge it's antitrust-compliant

WASHINGTON--Under fire for a marketing plan that may have improperly favored Windows Media Player, Microsoft on Wednesday told a federal judge that it's trying hard to avoid any anticompetitive behavior by employees.

At a conference in the same courtroom here last month, the company took heat from U.S. District Judge Colleen Kollar-Kotelly amid news that one of its employees had devised a marketing agreement that would have forbidden portable music player makers from bundling anything except Windows Media Player with their devices.

Although that document was quickly amended and never went out to manufacturers, its existence--and the judge's scolding--prompted Microsoft to direct "a very serious inward look at its compliance efforts," Charles Rule, an attorney representing Microsoft, said at the 50-minute follow-up meeting on Wednesday.

Rule said it was "with some chagrin" that the company discovered the music player incident. Microsoft has been working diligently to comply with a consent decree it entered into with the Bush administration in 2002 to settle a long-running antitrust suit, he said. Echoing Kollar-Kotelly's words at the last conference, Rule deemed the music player incident a "source of great concern" and "unacceptable."

In response, Microsoft plans to be more proactive in fending off such occurrences, which it described in more detail in a recent report filed with the court, Brad Smith, the software maker's general counsel, told the judge. Smith said he came to Washington to communicate "the seriousness of purpose we've brought to bear to address the issues raised in October." He said the matter has drawn input from Microsoft Chairman Bill Gates, CEO Steve Ballmer and the company's board of directors.

"One conclusion we reached very quickly was it was important for us to step back and look at everything we're doing," Smith said, particularly in light of the software maker's recent departmental reorganization.

Among other plans, the company intends to expand "antitrust training" to a greater, though unspecified, number of employees across multiple divisions. It already requires the sessions for its top officers. Since November 2001, more than 28,000 of its more than 50,000 employees--most of whom worked in the Windows division--have also received the training.

Microsoft also plans to impose several layers of internal review on a greater number of documents in the precontract stage, in hopes of catching problems like the music player one. Right now, one senior business person and one attorney must review documents from the company's platform and services division, which includes Windows. The new plans would extend that requirement to the entertainment and devices unit as well.

The plans drew no complaints from Kollar-Kotelly, who said she was happy that the company had listened to her criticism and "pleased at the renewed vigor in compliance efforts."