Troops start to gather for Microsoft legal battle

Living in Washington, you get to see public policy battles up close. I’ve been
following the paid and unpaid surrogates taking both sides of the Justice
Department’s antitrust case against Microsoft Corp. If the trial takes place this
month as scheduled, it would set a record for the shortest time from filing to trial.


The trial will be great theater. Both sides have mobilized plenty of legal and
political forces and money.


Most evident outside of the courtroom will be the surrogates—paid and
unpaid—appearing on the Sunday talking-head TV shows and on op-ed pages. I had a
preview when I attended a meeting of the Federalist Society last month at which lawyers,
economists, antitrust experts and free marketers spoke to a legal and congressional
audience.


The society is a high-quality, idea-exchanging group in which conservatives and
Republicans hash out their positions on public policy issues such as the Microsoft suit.
There is no liberal-Democratic counterpart to the Federalist Society, which is a pity,
given the robustness of the debate.


Microsoft surrogates at the meeting included Haley Barbour, former Republican party
chairman. Now a registered lobbyist for Microsoft, Barbour told the audience, in his
Mississippi drawl, that the Microsoft case was the tip of a Clinton-Gore administration
thrust to regulate the software industry. Barbour dismissed the 20 suits against Microsoft
by claiming all the states’ attorneys general are running for governor.


Rick Rule, a paid Microsoft gun who is a former Republican deputy assistant attorney
general for Justice’s Antitrust Division, provided a more legalistic defense. He said
that in the 130 pages of the Justice complaint, Netscape Communication Corp.’s name
appears 130 times. He congratulated Netscape’s lobbyists on having Justice put
forward a case so beneficial to Netscape. Rule contended that Microsoft does not have a
monopoly, that it has not acted anticompetitively and that its actions have benefited
customers.


Another pro-Microsoft, but unpaid, speaker was John Fund, an editorial writer at The
Wall Street Journal. He lashed out at the state attorneys general, calling them “one
big law firm,” the plaintiffs’ bar that worked together in tobacco litigation
and is now seeking other group projects.


Bob Levy, a lawyer from the Cato Institute, also spoke rousingly in support of
Microsoft. He said Justice’s case against Microsoft is an attack on private property,
and he called for the abolition of the antitrust laws. Levy compared Microsoft’s
bundling of its Web browser to a car dealer setting the radio stations on the car radio.
His point was that you can easily change the stations.


Opponents of Microsoft, including at least one paid surrogate, also used the forum for
their criticisms. Mike Petit, head of an organization known as ProComp, which includes a
series of corporate Microsoft opponents, said that Microsoft has engaged in a reign of
terror, using its monopoly power at choke points in the distribution channels. He said it
engaged in inappropriate tying arrangements.


Petit invoked the name of a former Supreme Court hopeful, Judge Robert Bork, who was
not at the meeting. Petit claimed Microsoft had approached Bork to represent it, but Bork
chose to side with the opponents after studying the case.


The senior counsel from the Senate Judiciary Committee, chaired by Orrin Hatch
(R-Utah), the most outspoken political critic of Microsoft, said the committee had
received important testimony from a diverse set of companies, all of whom alleged
Microsoft had acted illegally.


Microsoft has hired at least nine separate lobbying firms, spending approximately $1.9
million. It has spent another $1.2 million on its in-house lobbying activities in the past
six months. The company’s political action committee is helping lots of members.


Comparable spending figures are more difficult to assemble for the companies opposing
Microsoft. They include Netscape, Sun Microsystems Inc., Oracle Corp. and many others.


But it’s clear that they also are spending big money on outside lobbyists, public
relations firms and economists.


In the end, however, it will be the action in the courtroom that will determine how the
country views the issue. A Microsoft defeat would be a devastating legal and public
relations blow.


Conversely, if Justice’s case fails, it will likely be some time before the
department will bring any further action against Microsoft. Where would that leave the
coalition arrayed against the Redmond, Wash., giant?  


Stephen M. Ryan is a partner in the Washington law firm of Brand, Lowell &
Ryan. He has long experience in federal information technology issues. E-mail him at smr@blrlaw.com.

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