Microsoft Resigns from Industry Body SIIA

SAN FRANCISCO (03/07/2000) - Microsoft Corp. today resigned from industry organization the Software and Information Industry Association (SIIA). The move, which was not entirely unexpected, follows SIIA's filing of a "friend of the court" brief against the software giant in the ongoing U.S. government antitrust case last month.

Also today, Microsoft Chief Operating Officer Bob Herbold, who had been a member of SIIA's 19-person board, announced his resignation from the body's board.

Microsoft had been a member of SIIA for 14 years and paid the maximum level of dues to the organization of US$125,000 per year, according to SIIA President Ken Wasch. The industry body has an annual budget of $8 million, Wasch said in a phone interview today.

"If you're going to swim with the big fish, you can't complain when you get bit," Wasch said. "When our board of directors two years ago chose to get involved in the antitrust case, we discussed at length what the impact might be on our membership and influence. We recognized clearly at that time that we might lose members, including Microsoft, as a result of the position we were taking."

The SIIA filed its "friend of the court" brief last month on behalf of the U.S.

Department of Justice (DOJ) who, together with 19 U.S. states, are currently engaged in the final throes of an antitrust legal battle with Microsoft.

The SIIA brief agreed with the conclusions reached by U.S. District Court Judge Thomas Penfield Jackson in his findings of fact issued in November of last year where he deemed the software giant to be a monopoly which had engaged in anticompetitive practices to the detriment of both its industry rivals and consumers. [See "Industry Group Weighs In Against Microsoft," Feb. 1.]Microsoft spokesman Jim Cullinan in a phone interview today denied that the SIIA filing is the prevailing reason for the software giant quitting the organization. "It's one example of the problems SIIA has been having, they've been so focused on this one issue rather than core issues like piracy, privacy and encryption," Cullinan said. "There's no leadership and vision at SIIA, they're just focused on going after one of their own members."

"It's absolutely not true that we've lost focus, all those allegations are false" countered SIIA's Wasch. "Microsoft is uninterested in anything SIIA is involved in with the exception of the (antitrust) competitive issue." He added that of SIIA's 45 staff, only one person is working on the antitrust issue.

Wasch described the relationship between SIIA and Microsoft as akin to that existing between the U.S. and China. "They're too important to ignore, but there are some differences that will not be resolved any time soon," he said.

Cullinan said that analogy was "an indecipherable comparison."

Cullinan said that Microsoft had spent the past two years trying to work with the industry group to get it to focus on other issues aside from the antitrust lawsuit, pointing out that other IT heavyweights have also quit SIIA, naming Intel Corp. and Network Associates Inc.

Wasch replied that Intel left the organization two years ago and that it's natural behavior for companies to come and go from a trade group -- SIIA still has 1,200 members. "Our board of directors includes representatives from Reuters, Dow Jones, McGraw Hill, Sun, Oracle, PeachTree Software and Digital River," he said.

Now that Microsoft has quit SIIA, the company is better positioned to work with other industry organizations, notably antipiracy body the Business Software Alliance (BSA), the Computing Technology Industry Association (CompTIA) and the Information Technology Association of America (ITAA), Cullinan said. He castigated SIIA as "not being an effective representative for the (IT) industry," pointing to open positions within the organization and dwindling attendance at SIIA meetings.

Wasch admitted that the body has had some personnel issues to deal with resulting from the closure of its merger with another industry organization, but that now those issues have been sorted out. SIIA was formed on Jan. 1, 1999, when the Software Publishers Association (SPA) and the Information Industry Association (IIA) agreed to merge. [See "Software Trade Organizations Merge," Dec. 18, 1998.]When questioned on the timing of Microsoft's announcement, an industry source who preferred to remain anonymous said that Herbold last week raised some questions about SIIA's legal status resulting from the apparent nonfiling of some documents. "Microsoft was just trying to get the SIIA, trying to find some dirt on the organization," the source said. "It was a purely administrative thing and was corrected today."

Microsoft, in Redmond, Washington, can be reached at +1-425-882-8080 or via the Internet at http://www.microsoft.com/. SIIA, based in Washington, can be reached at +1-202-452-1600 or via the Internet at http://www.siia.net/.

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