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THE CUTTING EDGE | NEWS ANALYSIS

Microsoft Media Campaign Part of a Broader Effort

Technology: Reports of 'political-style' lobbying come as firm's counsel attempts to stave off a separate antitrust suit.

April 13, 1998|LESLIE HELM | TIMES STAFF WRITER

Microsoft's plan for a secret media campaign was part of a much larger effort to influence government officials and win over public opinion in the crucial period when state and federal regulators consider filing broad antitrust cases against the software giant.

The multi-state plan, described in a confidential document obtained last week by The Times, talks of a political-style campaign aimed at influencing attorneys general in 12 states and "coordinated in lock-step with the lobbying and friends effort."

The Justice Department has filed a suit against the Redmond, Wash.-based company, alleging that Microsoft was violating a consent decree by requiring computer companies seeking to offer its popular Windows 95 operating system to also install its Internet Explorer Web browser.

The Justice Department is reportedly looking into a broader antitrust case.

Separately, attorneys general of 12 states--including California, New York and Texas--have been gathering evidence for a separate lawsuit alleging anti-competitive practices.

"We want to make sure our consumers have competitive options," said the assistant attorney general of one of the participating states. He said no decision has yet been made on whether or not to file suit.

On Friday, Microsoft General Counsel William Neukom met with Assistant U.S. Atty. Gen. Joel Klein and other top antitrust officials for 3 1/2 hours in what may have been an effort to reach a compromise that would avert such a suit.

Although Microsoft now says it has no plans to go ahead with the multi-state media campaign, company officials did confirm that they might implement elements of the plan, which talks of "placing" letters to the editor and op-ed pieces in newspapers across the country to counter negative media coverage.

Microsoft has already launched other efforts to make its position heard. On Thursday, the company ran ads in major newspapers across the country that contained what it called "essays" designed "to refocus the current debate over competition." And Microsoft has been steadily boosting its spending on lobbyists. In the last half of 1997, the company increased to $1.2 million its budget for political lobbying in Washington, D.C., double the amount it spent the year before.

Even if Microsoft does not face broader state and federal antitrust suits, it still has to contend with an ongoing Justice Department suit filed in October that is now before a federal district court. The department is charging Microsoft with violating a 1995 consent degree by requiring computer companies that want to offer its Windows operating system to also offer its Explorer browser.

Early last month the momentum against Microsoft appeared to be rising as 27 state attorneys general filed an amicus brief supporting the Justice Department's action.

Public relations executives who have worked for Microsoft blame the software giant's competitors for the anti-Microsoft sentiment and say it is only reasonable to expect Microsoft to respond in kind.

"How do you think this stuff gets on the [attorneys general's] radar screens?" asked one Microsoft public relations executive. "They get prodded. These actions don't just drop out of the sky."

Further, it would be irresponsible for Microsoft not to respond aggressively, the executive said. "It's very understandable and responsible from a shareholder perspective for Microsoft to try and tell its story," the executive said.

Some of the elements of the campaign are hardly unusual. For example, the plan calls for "lists of targeted statewide media outlets [print, TV, radio], possible third-party supporters, academicians at state colleges and universities who share our view and state and local officials" who could be tapped to support Microsoft's perspective.

Even some of the more brazen tactics described in the Microsoft plan, such as paying freelancers to write op-ed pieces that are then submitted to local papers, have recently become common practice, public relations officials say.

"If people didn't do things like that, there wouldn't be PR companies all over the country," said an official at one PR company recruited by Microsoft for its multi-state campaign.

Strategic Issues Management Group, a public relations firm in Tucson, was recently taken to task for placing in local newspapers letters to the editor written by the firm but signed by a student who was unaware of the contents of the letters.

Even hiring local public relations companies to pitch stories so that the stories appear to be arising spontaneously from below rather than managed from above is not such an unusual tactic, said the Microsoft PR executive.

"It's no worse than a [large] beer company using a different label to act like a microbrewery," the official said.

Leslie Helm can be reached via e-mail at leslie.helm@latimes.com

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