IP: Court just one venue still available to punish Microsoft by Dan Gilmor SJMN

[David Farber <dave () farber net>]

Court just one venue still available to punish Microsoft

For a largely meaningless exercise, there's still some value in Wednesday's 
U.S. Senate Judiciary Committee hearing on the Microsoft antitrust 
settlement and its fallout. But the really important action remains in the 
courts -- and regulatory bodies in parts of the world where protecting 
competition still matters as a matter of policy.

Charles James, head of the Justice Department's Antitrust Division, is 
among several witnesses slated to testify before the Senate committee. As 
the Bush administration's antitrust non-enforcer in chief, he'll once again 
defend his sellout of the public interest in the settlement, which was 
endorsed by nine of the states that had joined the antitrust suit.

Oh, several members of the committee will huff and puff their displeasure 
over the settlement. But in a time when the department holds Congress and 
the law in such blatant contempt, that'll probably be the end of it as far 
as the lawmakers are concerned.

Astute observers of the Microsoft situation will welcome the public 
attention to the betrayal of duty. Then they'll re-focus on the venues 
where there's still the possibility, however remote, of making a difference.

Court is the first stop. Last week, nine states that couldn't stomach the 
James capitulation filed a remarkably well-considered request with the new 
federal judge on the case. They asked for actual remedies, not the 
theoretical, loophole-ridden bogus remedies in the department's settlement.
The states also asked for genuine compliance measures, including the 
appointment of a ``special master'' who'd keep an eye on a company that has 
never shown the slightest willingness to comply with anything imposed from 
outside. Microsoft is expected to issue its predictable ``no way will we 
agree to anything of the sort'' response today.

These filings are independent of what's called the ``Tunney Act'' 
proceedings that are part of any settlement process. U.S. District Judge 
Colleen Kollar-Kotelly is supposed to ensure that antitrust settlements are 
in the public interest.

That gives her plenty of latitude. The dispute among the plaintiffs should 
be a warning flag that this is no time to be a rubber stamp, but judges 
tend to approve such settlements barring some obvious evidence of 
malfeasance or political chicanery.

There's no secret about the Bush administration's overt hostility to 
enforcing this particular law, especially in this particular industry and 
with this particular defendant. Some of the administration's stance seems 
to be ideological, but wrong-headed policies are legal.

No one denies the millions of dollars in lobbying and campaign 
contributions Microsoft has made to Republican candidates and interests. 
Our campaign finance system is the equivalent of bribery, but it's also legal.

Did James make a deal with Microsoft for other reasons we haven't been 
told? Everyone denies it. Putting people under oath would be useful to help 
settle the issue.

One of the pitfalls for Microsoft in the continuing process is the way it 
brings corporate arrogance to legal proceedings. When Microsoft appears 
before a federal judge, it always seems to annoy -- if not infuriate -- the 
judge. Maybe that's part of the strategy.

The government's antitrust action isn't the only legal proceeding where 
Microsoft is trying to skate away from its wrongdoing. Many of the 
plaintiffs' attorneys in the big civil case, being heard in Baltimore, had 
made a deal whereby Microsoft would donate some money (which it could write 
off on taxes) and software to schools, thereby bolstering the monopoly in a 
market where there's still a modest amount of competition and making a 
potentially serious liability go away.

Again, some of the people involved in the case aren't sitting still for 
what looks like yet another sellout of the public interest. That case is 
heading for last-ditch mediation.

One of the most serious problems facing Microsoft isn't domestic. The 
European Union's investigation of anti-competitive practices is moving 
along, albeit slowly, and the penalties there could be stiff.
One of the remarkable parts of the Microsoft saga has been the company's 
absolute refusal to acknowledge wrongdoing. James completed his 
department's cave-in when he didn't require the company to express even a 
hint of having engaged in lawbreaking, however phony such an admission 
would have been in light of its consistent arrogance.

Perhaps there's some logic not requiring this plea-copping defendant to 
admit anything. After all, the proposed penalties are meaningless, too. An 
intellectually honest settlement, based on the current document, would have 
been a flat-out exoneration by a Justice Department that doesn't want to 
enforce the law, period.

Maybe Judge Kollar-Kotelly will ask Microsoft's lawyers if they admit 
lawbreaking by their client. Whether she does or not, let's hope she 
doesn't just rubber-stamp this sellout of a settlement. Inviting the 
lawbreaker to do it again shouldn't be anyone's idea of protecting the 
public interest.

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