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Microsoft prepares to avoid scrutiny under Biden

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(Reuters) — Microsoft, which has largely evaded Washington’s scrutiny of Big Tech companies and has scored a lucrative $10 billion government contract under U.S. President Donald Trump’s administration, has emerged as a significant backer of Democratic presidential candidate Joe Biden’s campaign.

The Redmond, Washington-based software company is the fourth largest contributor to Biden’s candidate campaign committee, according to data from OpenSecrets, a website that tracks money in politics and campaign finance records.

Microsoft president Brad Smith has played a key role behind the scenes, including hosting a fundraiser for Biden last year in Medina, Washington. He is also a big dollar bundler — someone who helps raise more than $25,000 for a campaign — and played a public role during the Democratic National Convention, similar to Amazon policy chief Jay Carney.

Microsoft CTO Kevin Scott and wife Shannon Hunt-Scott have contributed over $50,000 and supported committees to help Biden win, according to campaign finance records. Microsoft board member and LinkedIn cofounder Reid Hoffman and wife Michelle Yee have also donated to the Biden campaign. Yee has contributed over half a million dollars to the Biden victory fund.

Senior executives at Microsoft also donated more to the Biden campaign during the primaries than any other large tech company, according to data from the Revolving Door Project, part of the Center for Economic and Policy Research (CEPR).

“Microsoft has been playing politics for much longer than the other large technology companies that are widely talked about,” CEPR researcher Max Moran said, adding that it has been around longer than most U.S. tech companies.

“It knows how to play the game on both sides of the aisle,” he added.

Companies are prohibited by law from donating themselves. The contributions, according to OpenSecrets, were therefore made by the company’s political action committees (PACs), members of the PACs, or employees.

A Microsoft spokesperson said the company has a history of engaging with presidential administrations on issues that matter to its business. “Our approach has been consistent: We’ll partner where we can, we’ll stand apart where we should,” she said, adding that the contributions were made by Microsoft’s employees, without offering more details.

Large technology companies, including Microsoft, have not emerged in the top 20 contributors list for Trump’s campaign committee. However, Microsoft’s Smith, whose donations have mostly helped Democrats, has made several contributions to Republicans, including a $15,000 donation to the National Republican Congressional Committee, according to campaign finance records.

The Trump campaign’s top contributors include government employees from the U.S. Postal Service and the Department of Defense, followed by companies like American Airlines and banks like Wells Fargo, according to OpenSecrets.

The Trump campaign did not respond to a request for comment.

Biden campaign spokesperson Matt Hill did not comment on the story, but he pointed to an earlier statement shared with Reuters that said: “Many technology giants and their executives have not only abused their power, but misled the American people, damaged our democracy, and evaded any form of responsibility. That ends with a President Biden.”

Hill said on Monday that the campaign does not accept corporate PAC money.

Microsoft has escaped escalating criticism from Washington lawmakers and regulatory probes that have culminated in the Justice Department filing a large antitrust lawsuit against Alphabet’s Google.

In fact, the lawsuit will potentially create an opportunity for Microsoft to increase usage of its Bing search engine — years after it abandoned a long campaign for legal relief.

The company’s other large competitors, including Facebook, Apple, and Amazon, are also grappling with various state and federal investigations.

Earlier this year, Microsoft won a highly controversial $10 billion cloud computing contract from the U.S. Department of Defense after it defeated Amazon in a contest marred by allegations of political influence by Trump.

‘Adult in the room’

On the topic of antitrust, Microsoft has presented itself as the “adult in the room,” a strategy that will continue to ensure regulatory attention is diverted to its rivals, CEPR’s Moran said.

Smith and Microsoft, for example, have spent time and resources on remaining in the good graces of Democratic lawmakers.

Earlier this year, Smith met with the House Judiciary antitrust subcommittee, which produced a scathing report on ways Big Tech companies hurt competitors. During the meeting, Smith offered Microsoft’s perspective as a company that has faced antitrust regulation in the past and discussed his company’s concerns about the way Apple operates its App Store, according to a source familiar with the matter.

Lawyers and antitrust experts said Microsoft still faces some challenges, even though they are not likely to result in any meaningful action in the immediate future, assuming Biden wins. For example, in February the Federal Trade Commission said it will examine prior acquisitions from Big Tech companies, including Microsoft. In Europe, the company also faces an antitrust complaint from Slack, which operates a product similar to Microsoft Teams.

“It’s the classic case of shiny objects,” Howard University School of Law professor Andrew Gavil said. “Microsoft has succeeded in making sure the attention stays on everybody else even when they continue to be dominant in many areas they operate.”

(Reporting by Nandita Bose in Washington. Editing by Chris Sanders and Edward Tobin.)


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