Critic of Microsoft Got $9.75 Million Payment in Settlement

The entire case could be entirely above board and proper. Not all of the facts are in the public domain. There are perfectly good explanations why this has happened that do not entail unethical or illegal behavior. However, it just looks bad when Microsoft settles with its long-time adversary, the Computer and Communications Industry Association, for $19.75 million, and the president of the CCIA gets almost half of that money. The uncharitable might think his payment was a bribe to get his group to back off the software giant.

The president of the CCIA, Ed Black, got his payment as part of an annex to the agreement between CCIA and Microsoft. The agreement itself compensates the CCIA for “certain legal-related expenditures it has incurred ... and provide substantial institutional support for new and important policy undertakings.” The CCIA withdrew its support for European anti-trust actions against Microsoft which it has been fighting for six years.

While the agreement was approved by the CCIA board and Microsoft, the annex to the agreement was approved solely by the CCIA board. Now, some say that it would be impossible for Microsoft not to know what was in the annex, while others say that once Microsoft’s money went to the CCIA, it had no more control over the money.

The real problem here is one of appearances, unless hard evidence of something truly bad turns up. Microsoft is hated far and wide for being successful, or for having third-rate products, or for both of those reasons. It is a target. But because of that, it must be purer than Caesar’s wife. The settlement with the CCIA should never have included an annex. Microsoft should have taken care to avoid the appearance of wrongdoing.

As for the CCIA and Mr. Black, any settlement after six years was going to attract a great deal of scrutiny. Passing Microsoft’s payment in part to Mr. Black simply looks fishy. It should never have happened in this fashion, if at all.

Going to court and having trials is largely a waste of time and effort if business leaders earnestly try to negotiate settlements, and few cases need to go to trial. But when a settlement is made, parties must pay attention to not only justice done, but the appearance of justice being done.


© Copyright 2004 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.


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