From: Rich Gauszka 

I tend to agree that it's better to say that the Microsoft backpedaling
started with the Clinton administration and continues with the Bush
administration.



Gary Britt wrote:
> It seems to me that there are several inaccuracies in this article.  The
> Clinton administration did not request the strong split up and other
> remedial measures ordered by Judge Penfield Jackson.  As I recall Judge
> Jackson refused the sweetheart deal sell out by the Clinton
> administration and came up with his own order.  It was this much tougher
> than the Clinton administration wanted order that was over turned by the
> appeals court and I believe the Clinton administration argued at the
> appellate court for the tough order from Jackson to be overturned in
> favor of the Clinton administration sell out deal.  The consent decree
> over windows 1995 that the Clinton administration did was the beginning
> of the sell out for Microsoft Monopoly and left them completely
> unencumbered to pursue their monopoly practices.  History since that
> original consent decree has shown that Judge Jackson was correct and the
> market and even Microsoft itself would have been better off had Judge
> Jackson's split up order been left in tact.
>
> I don't know if Bush administration has gotten easier on other companies
> as regards antitrust, but this article is full of errors regarding the
> history of MS antitrust treatment and what the Clinton administration
> did and didn't do with MS and antitrust.
>
> Gary
>
> Rich Gauszka wrote:
>> "The generous and noncynical view is that there has been a fundamental
>> change in philosophy about the degree to which antitrust should be
>> used to regulate business activity,"
>>
>>
http://www.nytimes.com/2007/06/10/business/10microsoft.html?ei=5065&en=a6f3d
d79c5258b91&ex=1182052800&partner=MYWAY&pagewanted=print
>>
>>
>> WASHINGTON, June 9 - Nearly a decade after the government began its
>> landmark effort to break up Microsoft, the Bush administration has
>> sharply changed course by repeatedly defending the company both in the
>> United States and abroad against accusations of anticompetitive
>> conduct, including the recent rejection of a complaint by Google.
>>
>> The retrenchment reflects a substantially different view of antitrust
>> policy, as well as a recognition of major changes in the marketplace.
>> The battlefront among technology companies has shifted from computer
>> desktop software, a category that Microsoft dominates, to Internet
>> search and Web-based software programs that allow users to bypass
>> products made by Microsoft, the world's largest software maker.
>>
>> In the most striking recent example of the policy shift, the top
>> antitrust official at the Justice Department last month urged state
>> prosecutors to reject a confidential antitrust complaint filed by
>> Google that is tied to a consent decree that monitors Microsoft's
>> behavior. Google has accused Microsoft of designing its latest
>> operating system, Vista, to discourage the use of Google's desktop
>> search program, lawyers involved in the case said.
>>
>> The official, Thomas O. Barnett, an assistant attorney general, had
>> until 2004 been a top antitrust partner at the law firm that has
>> represented Microsoft in several antitrust disputes. At the firm,
>> Justice Department officials said, he never worked on Microsoft
>> matters. Still, for more than a year after arriving at the department,
>> he removed himself from the case because of conflict of interest
>> issues. Ethics lawyers ultimately cleared his involvement.
>>
>> Mr. Barnett's memo dismissing Google's claims, sent to state attorneys
>> general around the nation, alarmed many of them, they and other
>> lawyers from five states said. Some state officials said they believed
>> that Google's complaint had merit. They also said that they could not
>> recall receiving a request by any head of the Justice Department's
>> antitrust division to drop any inquiry.
>>
>> Mr. Barnett's memo appears to have backfired, state officials said.
>> Prosecutors from several states said they intended to pursue the
>> Google accusations with or without the federal government. In
>> response, federal prosecutors are now discussing with the states
>> whether the Justice Department will join them in pursuing the Google
>> complaint.
>>
>> The complaint, which contends that Google's desktop search tool is
>> slowed down by Microsoft's competing program, has not been made public
>> by Google or the judge overseeing the Microsoft consent decree,
>> Colleen Kollar-Kotelly of the Federal District Court in Washington. It
>> is expected to be discussed at a hearing on the decree in front of
>> Judge Kollar-Kotelly this month.
>>
>> The memo illustrates the political transformation of Microsoft, as
>> well as the shift in antitrust policy between officials appointed by
>> President Bill Clinton and by President Bush.
>>
>> "With the change in administrations there has been a sharp falling
>> away from the concerns about how Microsoft and other large companies
>> use their market power," said Harry First, a professor at the New York
>> University School of Law and the former top antitrust lawyer for New
>> York State who is writing a book about the Microsoft case. "The
>> administration has been very conservative and far less concerned about
>> single-firm dominant behavior than previous administrations."
>>
>> Ricardo Reyes, a spokesman for Google, declined to comment about the
>> complaint.
>>
>> Bradford L. Smith, the general counsel at Microsoft, said that the
>> company was unaware of Mr. Barnett's memo. He said that Microsoft had
>> not violated the consent decree and that it had already made
>> modifications to Vista in response to concerns raised by Google and
>> other companies.
>>
>> He said that the new operating system was carefully designed to work
>> well with rival software products and that an independent technical
>> committee that works for the Justice Department and the states had
>> spent years examining Vista for possible anticompetitive problems
>> before it went on sale.
>>
>> He said that even though the consent decree did not oblige Microsoft
>> to make changes to Vista in response to Google's complaint, Microsoft
>> lawyers and engineers had been working closely with both state and
>> federal officials in recent days in search of an accommodation.
>>
>> "We've made a decision to go the extra mile to be reasonable," Mr.
>> Smith said. "The discussions between the company and the various
>> government agencies have been quite fruitful."
>>
>> Microsoft was saved from being split in half by a federal appeals
>> court decision handed down early in the Bush administration. The
>> ruling, in 2001, found that the company had repeatedly abused its
>> monopoly power in the software business, but it reversed a lower court
>> order sought by the Clinton administration to split up the company.
>>
>> Google complained to federal and state prosecutors that consumers who
>> try to use its search tool for computer hard drives on Vista were
>> frustrated because Vista has a competing desktop search program that
>> cannot be turned off. When the Google and Vista search programs are
>> run simultaneously on a computer, their indexing programs slow the
>> operating system considerably, Google contended. As a result, Google
>> said that Vista violated Microsoft's 2002 antitrust settlement, which
>> prohibits Microsoft from designing operating systems that limit the
>> choices of consumers.
>>
>> Google has asked the court overseeing the antitrust decree to order
>> Microsoft to redesign Vista to enable users to turn off its built-in
>> desktop search program so that competing programs could function
>> better, officials said.
>>
>> State officials said that Mr. Barnett's memo rejected the Google
>> complaint, repeating legal arguments made by Microsoft.
>>
>> Before he joined the Justice Department in 2004, Mr. Barnett had been
>> vice chairman of the antitrust department at Covington & Burling. It
>> represented Microsoft in the antitrust case and continues to represent
>> the company.
>>
>> In a recent interview, Mr. Barnett declined to discuss the Google
>> complaint, noting that the decree requires complaints by companies to
>> be kept confidential. He defended the federal government's overall
>> handling of the Microsoft case.
>>
>> "The purpose of the consent decree was to prevent and prohibit
>> Microsoft from certain exclusionary behavior that was anticompetitive
>> in nature," Mr. Barnett said. "It was not designed to
pick who would
>> win or determine who would have what market share."
>>
>> "We want to prevent Microsoft from doing those things that exclude
>> competitors," he added. "We also don't want to disrupt
the market in a
>> way that will be harmful to consumers. What does that mean? We've
>> never tried to prevent any company, including Microsoft, from
>> innovating and improving its products in a way that will be a benefit
>> to consumers."
>>
>> Prosecutors from several states said that they believed that Google's
>> complaint about anticompetitive conduct resembled the complaint raised
>> by Netscape, a company that popularized the Web browser, that was the
>> basis of the 1998 lawsuit.
>>
>> Richard Blumenthal, the Connecticut attorney general, declined to talk
>> about the substance of the complaint, or which company made it. But he
>> said the memo from Mr. Barnett surprised him.
>>
>> "Eyebrows were raised by this letter in our group, as much by the
>> substance and tone as by the past relationship the author had had with
>> Microsoft," said Mr. Blumenthal, one of the few state prosecutors who
>> has been involved in the case since its outset.
>>
>> "In concept, if not directly word for word, it is the
>> Microsoft-Netscape situation," Mr. Blumenthal said. "The
question is
>> whether we're seeing d‚j… vu all over again."
>>
>> The administration has supported Microsoft in other antitrust
>> skirmishes as well.
>>
>> Last year, for instance, the United States delegation to the European
>> Union complained to European regulators that Microsoft had been denied
>> access to evidence it needed to defend itself in an investigation
>> there into possible anticompetitive conduct. The United States
>> delegation is led by Ambassador C. Boyden Gray, who had worked for
>> Microsoft as a lawyer and lobbyist.
>>
>> Robert Gianfrancesco, a spokesman for the delegation, said that
>> Ambassador Gray had not formally removed himself from involvement in
>> Microsoft issues but was not involved in the complaint to European
>> regulators, which was handled by other American diplomats in the
>> delegation.
>>
>> In December 2005, the Justice Department sharply criticized the Korean
>> Fair Trade Commission after that agency ordered major changes in
>> Microsoft's marketing practices in Korea.
>>
>> And in 2004, the Justice Department criticized the European Commission
>> for punishing Microsoft for including its video and audio player with
>> its operating system.
>>
>> Antitrust experts attribute the Bush administration's different
>> approach to Microsoft to a confluence of political forces as well as
>> significant changes in the marketplace.
>>
>> A big factor has been the Bush administration's hands-off approach to
>> business regulation. For its part, Microsoft, which spent more than
>> $55 million on lobbying activities in Washington from 2000 to 2006 and
>> substantially more on lawyers, has become a more effective lobbying
>> organization.
>>
>> "The generous and noncynical view is that there has been a fundamental
>> change in philosophy about the degree to which antitrust should be
>> used to regulate business activity," said Andrew I. Gavil, an
>> antitrust law professor at Howard University who is a co-author of the
>> Microsoft book with Professor First, the New York University law
>> professor. "In the Microsoft case, you can see how that change has
>> manifested itself."
>>
>>

--- BBBS/NT v4.01 Flag-5