Microsoft's top lawyer has some advice for Mark Zuckerberg

Key Points
  • Brad Smith, Microsoft's president and chief counsel, spoke about the company's antitrust case in the 1990s at the Code Conference on Tuesday.
  • He said that every company needs to figure out when it's no longer a start-up and become more willing to compromise.
  • Smith also said that if companies don't address the issues that people are concerned about, they'll face regulation.
Brad Smith, President and Chief Legal Officer, Microsoft speaking at the 2018 Code Conference on May 29th, 2018.
Asa Mathat | Vox Media

Tech history repeats itself, and nobody knows that better than Brad Smith, Microsoft's president and chief counsel.

Smith was deeply involved in Microsoft's antitrust battle against the federal government in the 1990s, and remembers how resolved the company was to fight it.

That turned out to be a mistake, Smith said at the Code Conference in Rancho Palos Verdes, California, on Tuesday.

"If we had worked things out in 1998, we might have been able to work them out before it became the antitrust version of nuclear war," Smith said. Instead, the federal government tried to break up the company, a ruling that was eventually overturned on appeal.

Smith sees parallels at Facebook, which has come under recent scrutiny from the government over issues like Russian operatives using the platform to try and influence the 2016 presidential election and the Cambridge Analytica data leak.

'Not a start-up anymore'

The trouble, according to Smith, is that every start-up is fighting against incredible odds when it starts out. To survive, executives need a strong competitive instinct.

But, he said, "there comes a moment in time you're not a start-up anymore," and at that point, it actually "takes more courage" to compromise than to keep fighting.

Smith said the biggest problem with Microsoft's decision to fight was the distraction it created for top executives like Bill Gates and Steve Ballmer. As a result, "we missed search" and many other business areas, allowing competitors like Google, Apple, and Amazon to get huge head starts.

Smith said Microsoft wouldn't have caught every new innovation, but "the odds of seeing these things would have been higher."

Rep. Blackburn: Zuckerberg 'unprepared' for questions

Smith did offer some praise for Mark Zuckerberg, who wasn't as combative in his appearance before Congress as Microsoft execs were in the 1990s. In particular, Zuckerberg at least admitted that there might be a problem and that the tech industry might need more regulation.

"One of the things Mark Zuckerberg did well when he testified was to say, 'We understand regulation may be in order.'"

According to Smith, the tech industry has to address people's concerns about privacy and power, or else regulation is likely.

"Radio has been regulated, television has been regulated, the one area that has not been regulated is the internet," he said.