Bill Gates warns Silicon Valley not to be the new Microsoft

Trust me on this.
Trust me on this.
Image: AP Photo/Matthias Schrader
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Microsoft founder Bill Gates has a message for Silicon Valley: Don’t be Microsoft.

In the 1990s, the Seattle software giant became enemy number one for the US anti-trust regulators. Flexing its market muscle, the software giant elbowed out potential software and hardware competitors. Briefly, Microsoft became one of the most valuable companies of all time, but ultimately regulators clipped its wings, forcing it to curb aggressive practices in new markets eventually claimed by the likes of Google, Intuit, and Facebook.

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Today, tech giants such as Facebook and Google have been put on notice, Gates said in an interview with Axios. ”The companies need to be careful that they’re not … advocating things that would prevent government from being able to, under appropriate review, perform the type of functions that we’ve come to count on,” he said. When asked if he sees that happening now, he replied, ”Oh, absolutely.”

Microsoft’s own battle with regulators lasted 21 years. It narrowly avoided being split up after using its Windows operating system to smother competing products on the web like Netscape’s Navigator. Regulators extracted a consent decree that forced Microsoft to makes its products compatible with other products, and not shut out potential competitors.

More dramatic, however, was the change in company culture. “Since the antitrust suit, they have become much more cautious and much less aggressive,” observed Michael Cusumano, a professor at MIT Sloan School of Management, in 2011. Only recently has Microsoft found its footing in the new technology landscape.

Gates warned that Silicon Valley’s freewheeling libertarianism, a successful strategy when tech companies were insurgents, won’t fly at the scale of Google, Facebook, and Amazon. He singled out payments as a sore spot: “The tech companies have to be … careful that they’re not trying to think their view is more important than the government’s view, or than the government being able to function in some key areas,” he said, noting the Valley’s penchant enthusiasm for “making financial transactions anonymous and invisible, and their view that even a clear mass-murdering criminal’s communication should never be available to the government.”

You can see the full interview here.