The company names two compliance officers in anticipation of concluding its antitrust settlement with the Justice Department and nine of 18 states.
Odell Guyton, 46, a former federal prosecutor, will become Microsoft's director of compliance, overseeing the company's compliance assurance program, as required under the proposed consent decree.
David Dadoun, 37, a former Federal Trade Commission antitrust enforcement lawyer, will serve as internal antitrust compliance officer to administer the company's antitrust compliance program.
Dadoun already works for Microsoft's Law and Corporate Affairs antitrust practice group.
"As a major employer and a leader in our industry, we take our legal obligations very seriously," Microsoft CEO Steve Ballmer said in a statement.
"These new compliance officers will help us do an even better job of understanding our responsibilities under the law and ensuring that all our people know what's expected of them. We are committed to full compliance with the antitrust settlement, as well as all the other laws and regulations affecting our business."
Though Microsoft announced both appointments simultaneously, the two men will perform drastically different jobs for the company. Guyton will be responsible for making sure Microsoft employees don't run afoul of employment and anti-discrimination statutes or violate laws governing civil rights, competition, foreign trade or privacy, among others.
Dadoun has the arduous task of compliance liaison, as Microsoft prepares for life after the settlement deal it cut with federal and state trustbusters goes into effect--assuming U.S. District Judge Colleen Kollar-Kotelly approves the agreement.
In November, the Justice Department and nine of 18 states settled the nearly 4-year-old landmark antitrust case. Nine other states and the District of Columbia chose to continue with litigation.
The agreement is undergoing 60 days of public comment as mandated by the Tunney Act. After another 30-day period when the Justice Department must publicly respond to the comments, Kollar-Kotelly will decide whether to approve, amend or reject the deal. She has the option of holding a hearing before making her decision.
According to the terms of the proposed settlement, Microsoft had until 30 days after Kollar-Kotelly entered the agreement as a formal consent decree to designate a compliance officer. The company chose not to wait that long.
Among other duties, as compliance officer, Dadoun is the liaison between Microsoft and a future three-person technical committee responsible for overseeing the consent decree. His responsibilities also include making sure all Microsoft directors are fully aware of the consent decree's contents, and fielding complaints about compliance.
"I think they are trying to implicitly address concerns that have been expressed about their good faith and trustworthiness in implementing the settlement," said Andy Gavil, an antitrust professor with Howard University School of Law. "They're trying to show they're going to take it seriously and undertake the steps they promised to undertake."
The Justice Department declined to comment on Dadoun's appointment.
Deal under fire
Microsoft appointed Dadoun just as the settlement deal has come under fire from a number of quarters.
During Wednesday's hearing before the Senate Judiciary Committee, lawmakers raised serious concerns about the settlement agreement.
Sen. Patrick Leahy, D-Vt., questioned whether the settlement, which he called "an invitation to further litigation, might have "a few too many loopholes."
During stiff questioning, Assistant Attorney General Charles James defended the settlement's enforceability. He described "three levels" of enforcement as an "unparalleled level of enforcement power."
But for the nine states--California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah and West Virginia--and the District of Columbia, which rejected the settlement, the compliance mechanism is inadequate.
In a remedy proposal filed Friday, the litigating states said they want Microsoft to establish a compliance committee made up of three boards of directors that have never worked for the company. This committee would be responsible for hiring a compliance officer.
The states' remedy proposal also called for stricter compliance monitoring and, as opposed to a technical committee, a court-appointed "special master" to oversee enforcement of the remedy.
"That's consistent with how they've done other things, that if it's not done from the outside, it can't be effective," Gavil said.
The states also asked for tougher sanctions against Microsoft, including giving the source code to Internet Explorer and the licensing of Office to other companies interested in porting the software to non-Windows operating systems.
Microsoft slammed the states' proposal Wednesday in a tersely worded rebuttal, accusing them of advancing "the commercial interests of powerful corporate constituents--Microsoft competitors such as Sun Microsystems, Oracle, Apple and Palm."
The company also refiled its Justice Department settlement as its remedy.