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THE CUTTING EDGE: FOCUS ON TECHNOLOGY

States Remain United in Battle With Microsoft

Antitrust: Attorneys general say they will pursue dismantling the software giant, even if the U.S. government drops the case.

November 27, 2000|JUBE SHIVER Jr. | TIMES STAFF WRITER

WASHINGTON — No matter the ultimate winner of the presidency, the 19 state attorneys general suing Microsoft Corp. for antitrust violations seem likely to continue to pursue the company, even if the federal government drops the case.

"I can't conceive of anything in this election that would alter our present determination," said Connecticut Atty. Gen. Richard Blumenthal, who along with the attorneys general of New York and Iowa has led the states' charge against Microsoft.

Although either George W. Bush or Al Gore could alter the nation's antitrust policy, the states say they remain united in their landmark antitrust case against the software giant. On Sunday, the state of Florida declared Republican Bush the winner of its disputed presidential election, but Democrat Gore moved to contest the results.

As a group, the states have been unwavering, citing the prospects of heightened industry competition from the merger of America Online Inc. and Microsoft archrival Netscape Communications Corp.

"I discern no change in the commitment of the states to pursue this matter," said Kevin J. O'Connor, a senior attorney in the Wisconsin attorney general's office who helped write many of the government's briefs in the Microsoft case.

If anything, said Bob Brammerr, spokesman for the Iowa attorney general, "it's likely the federal government will remain in the case also, no matter who wins the election, in light of the ruling" by U.S. District Judge Thomas Penfield Jackson.

Last June, Jackson ordered a breakup of Microsoft after finding that the software giant violated federal antitrust laws by using its flagship Windows operating system to muscle out its competitors.

Microsoft appealed Jackson's scathing antitrust rebuke and petitioned for repeated delays in the case--a strategy many experts believe was motivated by Microsoft's hope that a new administration might look more kindly on the company's antitrust plight.

The case is now before the U.S. Court of Appeals--a mostly conservative pro-business court where Microsoft thinks it may get a more sympathetic hearing.

The company is hopeful for a more benign replacement for antitrust cop Joel I. Klein, who spearheaded the Clinton administration's antitrust case against Microsoft before resigning as head of the U.S. Justice Department's antitrust division in September.

Some observers expect that a Gore administration would follow in line with the Clinton administration's prosecution of the Microsoft case, while a Bush administration may be more likely to select an antitrust chief sympathetic to Microsoft. Confirmation of the new antitrust chief could take months, and the nominee would have to be confirmed by the Senate Judiciary Committee, whose chairman, Sen. Orrin Hatch (R-Utah), has been a staunch critic of Microsoft.

What's more, Microsoft can take little solace in the outcome of state balloting in the fall elections, in which only two of the 19 state attorneys general suing Microsoft were replaced.

The new attorneys general-elect are Democrat Roy Cooper in North Carolina and Republican Mark Suurtleff in Utah. Suurtleff has indicated he will continue to support the Microsoft case. Cooper, who could not be reached, has not commented.

Some legal experts, however, believe that a Bush victory would make it less likely that the government would seek Supreme Court review of the Microsoft case if it loses at the appeals court level.

"The government isn't obligated to seek certification for an appeal. They could choose not to pursue it further," said Andrew Gavil, an antitrust expert and law professor at Howard University.

What's more, if the Justice Department and states parted ways on Microsoft, the states would have to shoulder all of the legal costs.

The Justice Department told Congress last year that it had spent $9.4 million since 1994 investigating and prosecuting Microsoft for antitrust violations. And in papers filed in U.S. District Court in August, the Illinois attorney general's office listed more than $1 million in costs incurred in pursuing Microsoft since 1997.

But Bush, who, ironically, was backed by Microsoft's main nemesis in the antitrust trial, former Netscape President James Barksdale, may not be a sure bet to stop the appeals. During his long campaign for the presidency, Bush repeatedly refused to comment on the Microsoft case.

In a rare comment on his likely antitrust policy, Bush pledged last April that "as president I will fully enforce antitrust laws to foster competition and innovation, to protect consumers and to guard against anti-competitive conduct."

A spokesman for Microsoft declined to comment on the elections.

Microsoft was the nation's fourth-largest donor of unregulated "soft money" contributions to candidates in the 1999-2000 political cycle, after AT&T Corp., United Parcel Service of America Inc. and Philip Morris Corp., according to Responsible Wealth, a network of more than 450 businesspeople based in Boston.

Bush attracted $52,740 in donations from Microsoft's 20,000 employees, compared with $29,000 for Gore, according to the Campaign Study Group in Centreville, Va.

Despite the spending, the eventual presidential victor will be hard-pressed to make any policy changes.

With election results so close, "it is unlikely that anything major is going to happen to Microsoft or the technology industry in general," said Jonna Seiger, co-founder of Mindshare.net, an online political strategies firm.

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