OS/2 Shareware BBS: 14 Text/14-Text.zip/msinvest.zip/msinvest.txt

Text File | 1994-05-07 | 48KB | 592 lines

Newsgroups: comp.os.os2.advocacy,comp.os.ms-windows.advocacy
From: [e-mail] (Steve Withers)
Subject: WiReD on MS and the DOJ
Message-ID: <[e-mail]>
Date: Sat, 23 Apr 1994 12:19:27 GMT


 WIRED 2.04
 Oh No, Mr. Bill!
 ****************

 The Inside Story of the US Governments' Antitrust Case Against Microsoft

 By Wendy Goldman


 Anne Bingaman had just crossed around Janet Reno's desk, flung her arms
 about the attorney general, and squeezed. She had Reno in the grip of one
 of her famous bear hugs. The rest of the staff stood in awe and kept a
 polite distance. These were  towering figures: the Justice giantesses.
 Reno is nearly 6'2", but some in the room noticed that antitrust titan
 Bingaman somehow managed to envelope her.

 It was a December morning at the DOJ. The staff meeting had begun as
 usual: at 8 am every Tuesday. All the bigwigs were present, and no one was
 overly surprised to see Anne Bingaman - known to be direct, demonstrative,
 and aggressive - being so  familiar with the attorney general.

 That's not to say that Reno and Bingaman always agreed. Well into the
 meeting, Bingaman engaged in a heated argument with her mentor - about a
 certain ambiguous ethical rule. "Janet didn't expect to get an argument
 from anyone but Anne," said one  staffer present at the meeting. Bingaman
 wanted her staff to be able to cut through the bureaucracy. In short, she
 wanted action. And Bingaman was usually one to get it. She had only
 recently set in motion a major reorganization of the antitrust  division,
 one that would see the unit emerging from the long slumber that began in
 the '80s, when, after the AT&T breakup, the Reagan administration
 essentially pulled the plug on antitrust enforcement.

 As Bingaman and Reno wrangled on this December morning, the groundwork was
 being laid for a federal antitrust injunction against Microsoft Corp.
 After a long and meandering investigation that had begun back in 1989 at
 the Federal Trade Commission,  Bingaman was about to give Microsoft
 Chairman Bill Gates one of her famous bear hugs - this time in the form of
 an antitrust suit.

 Mitchell Kapor, founder of Lotus Development Corp. and now chair of the
 Electronic Frontier Foundation, once said that Bill Gates wants nothing
 more than to be the Rockefeller of the Information Age. If that's true,
 Anne Bingaman just might be his  trust-busting Teddy Roosevelt.

 By March or April of 1994, sources close to the case said, Bingaman's
 antitrust deputies will call Bill Gates into their DC offices under the
 threat of a very public, and very viable, antitrust lawsuit. There they
 will give Gates a chance to nip the  case in the bud by signing a consent
 order that would force Microsoft to stop a range of alleged predatory
 practices. If he refuses (and Bill does not have a track record of bowing
 to government pressure), the Microsoft case may well join AT&T and  IBM in
 the antitrust hall of fame.

 According to government sources and documents, Washington attorneys, and
 witnesses close to the case, Bingaman's staff has found substantial
 evidence suggesting that Microsoft has violated the Sherman and Clayton
 acts, the most basic of antitrust  laws. (Most sources interviewed for
 this story would not go on the record.)

 Toward the end of January 1994, sources said, DOJ insiders were scurrying
 to have the case ready to file by early April, just before the
 much-vaunted annual spring meeting of the antitrust section of the
 American Bar Association in Washington.

 (Historically, the Supreme Court has timed its rare antitrust opinions
 right before this early spring antitrust powwow. "When the Supreme Court
 has an antitrust case they always try and get it announced the week before
 so the bar can kind of chew on  it at this spring meeting. The DOJ wants
 to do the same," said a Washington attorney working on the Microsoft case.)

 Bingaman had just hired Sam "Ziggy" Miller, a trial lawyer from the San
 Francisco law firm of Morrison & Foerster, specifically to head up
 litigation for the Microsoft case. While the case could be filed anywhere
 in the US, sources said it would  most likely be filed in the US District
 Court for the Northern District of California, the jurisdiction including
 Silicon Valley and most convenient to the numerous parties that would be
 called as witnesses.

 A public announcement of the first major monopoly case in more than a
 decade - right before the prestigious ABA event - would be sure to have
 the nation buzzing, and Bingaman would be recognized for heralding in a
 new era in antitrust enforcement.  While declining to comment on the
 specifics of the case, Andrew Berg, an attorney who represents Lotus
 Development Corp., acknowledged that "more and more people have been put
 on the case, as the evidence has proved to be substantial. We hope to see
 some action in early spring."

 After years of testimony and thousands of pages of evidence, an entire
 industry is perched in anticipation of the DOJ's action. The outcome of
 the case would have the potential to affect not only Microsoft's behavior
 in emerging markets, but also  the future viability of smaller digital
 players in the marketplace, and the variety and cost of computer products
 available to consumers. Moreover, the case promises to set a standard by
 which future antitrust cases in high-tech industries would be  weighed.

 Either by forcing Microsoft to sign a consent order, or through a
 successful law-suit, the case could dramatically alter the competitive
 landscape.

 "(Microsoft) uses the OS as the locomotive to pull a whole train of
 products through the market," said Bill Bluestein, director at Forrester
 Research Inc., a Cambridge, Massachusetts, market research firm. "What
 this will do is weaken Microsoft's  ability to set the standard in the
 industry. They'll have to truly compete... It would end a lot of the funny
 business that people allege Microsoft engages in."

 Bingaman's relationship with Reno will be critical to the antitrust
 chief's ability to accomplish her goals. Indeed, the financial and
 philosophical support of both the attorney general and the Clinton
 administration has proven essential to the  emergence of what promises to
 be the most important antitrust case since the breakup of AT&T in the mid
 '80s.

 The remedies sought in the Microsoft case, however, would be vastly
 different from those in the landmark AT&T case. Largely because of the
 government's experience with the drawn-out antitrust suits against AT&T
 and IBM (the former successful, the  latter not), so-called "structural"
 cases which attempt to breakup a company would still be avoided like the
 plague. "The DOJ almost has a genetic memory of these cases, which
 consumed enormous time and resources, and so stays clear of remedies that
 point to a split-up," said Robert Pitofsky, a key Clinton antitrust
 advisor who served on the president's transition team. (The epic IBM case
 severely distracted the computer giant as it battled the Justice
 Department from 1969 to 1982.)

 Instead, the case against Microsoft would be approached with surgical
 precision, focusing on relief through very specific changes in the
 company's software licensing policies and other business practices deemed
 to be anti-competitive. If a consent  order is finalized, Microsoft would
 soon afterwards have to file a compliance report stating what it has done
 to comply, and it probably would have to submit annual reports thereafter.
 Should an order be signed, its particulars will be enforced by a  DOJ
 regulator, who will have the right to review any and all Microsoft
 practices relating to the decree. Any violation of that decree would
 constitute contempt of court, resulting in fines, and, in extreme cases,
 jail time for Microsoft officers.  And nothing is ever straightforward -
 if Gates refuses to sign and the DOJ files its case, it is probable that
 Microsoft will request a summary judgment throwing it out.

 But attorneys close to the case say that tactic won't fly. "This is a
 clean, tryable case," said an attorney working on the case who asked to
 remain anonymous. "Justice does not want to get involved in another land
 war in Asia with the computer  industry. The only group that was stung by
 the IBM case more than IBM was Justice. This Microsoft suit will not be a
 repeat of IBM."


 The Case

 Bingaman stuck her neck out last August when she made the unprecedented
 and very public move of taking over the Federal Trade Commission's
 deadlocked case against Microsoft. (The case had deadlocked twice because
 of the recusal of one of the FTC's voting commissioners.) The antitrust
 chief would not be risking such a high-profile case if she did not feel
 there was substantial evidence of illegal conduct, her colleagues said.

 What has Microsoft done to merit being the subject of the first serious
 monopolization case in more than a decade? Having a monopoly in and of
 itself is not illegal, and some lobbyists on Microsoft's behalf protested
 that the government was merely  taking potshots at a global star. Indeed,
 antitrust law spells out that a monopolist may not be doing anything wrong
 if, having obtained market power by legitimate means, it maintains its
 power by possessing superior skill, foresight, and reasonable  industrial
 practices.

 Monopolization is illegal if it can be proved that a company has a
 specific "intent" to monopolize and a "dangerous probability" of success;
 or if a monopoly has already been achieved and has been maintained through
 anti-competitive or predatory  conduct. According to DOJ sources,
 Bingaman's staff felt it did not have to go far afield to prove that the
 most basic of antitrust violations had been committed. Microsoft, of
 course, feels differently. "Microsoft has not engaged in any conduct  that
 is even arguably in violation of the antitrust laws and intends to defend
 itself vigorously against any claim to the contrary," said William Neukom,
 senior vice president of law and corporate affairs, in a statement
 prepared for this story.

 "Microsoft does not agree that it is 'in a position of immense power' in
 the software industry," Neukom continued, quoting one of WIRED's
 questions. "In our experience, such assertions typically are made by
 disgruntled competitors who are angry  because Microsoft competes
 forcefully against them in developing and marketing quality software
 products. Microsoft's responsibility, however, is to keep its customers
 happy. Our efforts in that regard may have an opposite effect on
 Microsoft's  competitors."

 Perhaps, but long-standing antitrust law clearly prohibits
 anti-competitive conduct, and it spells out particular behavior that
 constitutes restraint of trade. The Sherman and Clayton Acts, enacted in
 1890 and 1914, respectively, prohibit conspiracy  to monopolize, illegal
 "tying" of product sales (between operating systems and applications, in
 Microsoft's case), and "exclusive dealing" that locks competitors out of a
 marketplace ("per processor" licensing schemes, in Microsoft's case).

 In legal documents presented to the DOJ, Washington attorneys representing
 Microsoft's competitors argue that the long-term viability in the
 operating-systems market requires that entrants be allowed to reach what
 in antitrust terms is called  "minimum viable scale," or, as the
 competitors put it, "a minimum market share threshold necessary both to
 sustain required ongoing investment and to recover the significant sunk
 cost of entry."

 As long as entrants are kept below that threshold, the attorneys argue,
 their ability to survive and compete is greatly hindered. With full
 understanding of this, Microsoft - according to its competitors - has
 engaged in a systematic campaign of  anti-competitive practices to prevent
 competing operating systems from reaching that threshold.

 Industry software developers have also provided evidence to the DOJ, under
 subpoena, that Microsoft's monopoly power in operating systems, and the
 related interface specifications for those operating systems, gives it
 control over a "technological  bottleneck" through which nearly all the
 other participants in the entire PC hardware and software industry must
 pass.

 "If the government takes appropriate action, what will result is greater
 competition in the market resulting in lower prices and a broader set of
 products for the consumer," said David Bradford, chief counsel for Novell
 Inc.

 The DOJ's formal charges against Microsoft will comprise a long laundry
 list of behavior in both the operating systems and application software
 markets, sources said. Competitors such as Lotus, Novell, Borland,
 Taligent, Sun Microsystems, and  WordPerfect have, in sworn testimony to
 DOJ investigators, charged Microsoft with exclusive dealing, predatory
 pricing, a range of "tying" schemes, predatory disparagement of
 competitors, monopoly leveraging, and predatory preannouncement of
 products.

 In the applications software market, the key areas of the alleged
 anti-competitive conduct include misleading application software
 competitors about future operating system strategies; controlling
 technology standards to benefit Microsoft's  application products and
 injure competitors; unfair access to technical information by internal
 Microsoft application developers; and anti-competitive sales, marketing,
 and promotional activities.

 Should Microsoft sign the consent or lose in court, it would face a number
 of dramatic modifications to its business practices. Among them is the
 implementation of a "Chinese Wall" that would guarantee that any
 information not disclosed to the  industry would also not be disclosed to
 Microsoft's internal developers.

 "The rule would be whatever you tell your own developers you'd have to
 tell everyone else," said Bob Metcalfe, publisher of Infoworld and
 inventor of the Ethernet networking technology.

 Forrester Research's Bluestein points out that with every new operating
 system release, Microsoft has an advantage since its developers have had
 information far in advance of everyone else in the industry. A case in
 point is Microsoft's current  plans for its forthcoming operating system,
 code-named "Chicago" and due later this year.

 In addition to "screwing up application developers if the release of
 information about Chicago isn't timely," Metcalfe said Microsoft is also
 holding the fate of operating system suppliers like IBM and Apple in its
 hands. "With Chicago, Microsoft is  angling to shake loose OS/2," Metcalfe
 said. One of OS/2's major selling points is its compatibility with
 Windows, he said. If future versions of OS/2 are incompatible with
 Chicago, its sales will suffer dramatically. The same logic applies to
 Pink,  the forthcoming OS from Taligent (the joint Apple/IBM company
 charged with creating a next-generation object-oriented OS).


 Exclusive Dealing

 Microsoft's competitors interpreted the company's long-standing practice
 of "per processor" licensing as an "exclusive dealing" scheme. Basically,
 in order to receive a volume discount on operating systems such as DOS and
 Windows, computer makers  must agree to pay software royalties to
 Microsoft for every computer they ship, regardless of whether the computer
 is sold with any Microsoft software. Competitors argued to the DOJ that
 the result of this licensing practice is the closure of  markets to
 would-be operating system innovators such as Taligent, Novell, and Sun
 Microsystems. As opposed to offering volume pricing, with a range of
 discounts being offered based on different volume levels, Microsoft's "per
 processor" licenses are  an all or nothing deal, computer makers
 confirmed. You can sign up and pay royalties on every computer shipped, or
 you can buy the operating system one copy at a time, for considerably more.

 "In order to consider an alternative operating system, a computer maker
 would have to be willing to pay twice for it," said a Zenith Data Systems
 source. "Everyone is already locked into paying royalties to Microsoft. If
 a better product came along,  even if we wanted to use it, we couldn't."

 "The way Microsoft licenses MS-DOS and Windows to original equipment
 manufacturers is the most efficient and cost-effective method we have
 found thus far for making our operating system technology broadly
 available to computer users at low prices,"  Neukom retorts. "Microsoft
 believes that its licensing practices are entirely legal and in no sense
 anti-competitive."

 In addition to challenging Microsoft's "per processor" licensing policies,
 the DOJ plans to address a variety of alleged "tying" schemes.
 "Technological tying" was said to give Microsoft's own internal
 applications developers advantages that  independent developers do not
 have in terms of access to information  about forthcoming operating system
 software and technology. Under the category of "information tying,"
 computer makers were allegedly threatened that they would not receive
 critical information on future product releases if they did not agree to
 pre-load both DOS and Windows on their computers, for example.

 Microsoft also allegedly tied sales of its application software to
 operating system sales, sometimes offering discounts to those who agreed
 to bundle applications software on their computers. It also allegedly gave
 itself beneficial "hooks" over  other developers by tying technology
 included in its operating systems, called undocumented calls, to code used
 secretly by its own application software and utility software developers.

 "Microsoft is now in the process of defending its undocumented calls as
 'trade secrets,'" said Gary Clow, president of Stac Electronics, whose
 company is engaged in an unrelated patent infringement suit against
 Microsoft. "This contradicts its  earlier statements that it does not use
 undocumented code that others in the industry do not have access to."

 "Microsoft does not engage in tying, nor has it done so in the past,"
 counters Microsoft counsel Neukom.

 Also high on the DOJ's list of Microsoft's alleged wrongdoings: "predatory
 disparagement" of competitors' products; creation of an appearance of the
 "incompatibility" of competing products when none exist (allegations
 include hooks in Microsoft's  operating systems that throw up misleading
 "error" messages on the screen when a user is running competing
 applications software); and alleged practice of "nonlinear pricing."

 The Clayton Act restricts companies from engaging in predatory pricing
 that drives competitors out of the market by selling products below the
 cost of production. In late 1993, Microsoft competitor Novell and its
 attorneys had, under civil  investigative demand, provided the DOJ with
 evidence of Microsoft's tying sales of its operating systems to sales of
 its lackluster Windows for Workgroups software. Microsoft was allegedly
 attempting to coerce original equipment manufacturers into  pre-loading
 Windows for Workgroups on their computers along with Microsoft DOS in
 exchange for a sharp price reduction in royalties. In some cases, Windows
 for Workgroups was being offered at a lower price than Windows.

 "Microsoft's practices are those of a classical monopolist bent on
 preserving and extending its market power by unlawful means," documents
 submitted to the DOJ by Novell state.

 "The record compiled to date shows serious harm to competition and
 consumers flowing from these practices," added Novell Chairman and CEO Ray
 Noorda, who has his own competitive ax to grind, but was one of the few
 CEOs willing to go on the record.  "Microsoft has been abusing this market
 for years," he said, adding that if a consent order was reached that
 forced Microsoft to stop certain of its practices, "that would be a baby
 step in the right direction. The industry has already been  irrevocably
 damaged."

 Their allegations are clear: By squeezing off distribution at the original
 equipment manufacturers channel through predatory licensing schemes, and
 by squeezing out competition through predatory tying schemes, Microsoft
 was essentially locking up  the operating system market and, by extension,
 the application market as well.

 Another high-level executive at a well-known software company put it this
 way: "We were raped by Microsoft. Bill Gates did it personally.
 Introducing Gates to the president of a small company is like introducing
 Mike Tyson to a virgin. This has to  be stopped."


 Behind the Scenes

 Changes at the antitrust division, bolstered by the financial and
 philosophical support of Reno and the Clinton administration, proved key
 to the Microsoft complaint moving forward again. When Bingaman was named
 by Bill Clinton last spring as the  nation's top antitrust cop, she knew
 that a major overhaul of the division was in order. Picking up the
 Microsoft case served to show the world what she was made of. The woman
 whom The New York Times called "the most seasoned of pols," wife of a
 two-term Democratic senator, got the ball rolling - and fast. Some at the
 DOJ could barely believe their eyes. Feathers were being ruffled, but
 things were getting done.

 Almost immediately upon her arrival at the DOJ, Bingaman made a lightning
 tour around town, surfacing in Congressional offices as well as making the
 rounds at the Office of Management and Budget. She gave graphic
 presentations, bolstered by blow-up  charts. She was making her point
 well: The economy had more than quadrupled, but the size of the antitrust
 division had stayed the same since WWII.

 As Bill Gates was meandering about the Comdex show in Las Vegas last
 November - having client dinners, giving his yearly speech to thousands of
 worshippers, and boogying at the Paladium and the Shark Club - Bingaman
 and her staff at the antitrust  unit were rejoicing: They'd recently won
 $4.7 million from Congress to beef up the joint. The trustbusters were
 back in business.

 But Bingaman was horrified when the staff presented her with a briefing
 book showing the antitrust unit's organizational chart and decision tree.
 The number of boxes that a case had to go through before a decision could
 be made was astounding.  Bingaman undertook a major reorganization,
 effectively squashing a vertical reporting structure that had kept the top
 people uninformed.

 "The new structure cuts down on wasted work," said Bingaman, in an
 interview with WIRED. "The problems were chain of command and vertical
 review." (Along with her staff, Bingaman declined to comment on the
 specifics of the Microsoft probe.)

 Bingaman's reorganization created a new merger deputy position - filled by
 former section chief Steven Sunshine - enabled regulatory deputy Robert
 Litan to devote most of his efforts to Microsoft and other nonmerger
 cases. That is to say, Microsoft  was his baby.

 Litan had known Bingaman for ten years. The two had worked together at a
 Washington law firm. He held both a law degree and a PhD in economics.
 Prior to his arrival at the DOJ, Litan spent most of his time as an
 economist at the Brookings  Institution, having scaled back his law
 practice at Powell Goldstein to part time.

 The other deputy assistant attorney generals who have played a critical
 role in the Microsoft case were Richard Gilbert and Diane Wood. They
 helped Litan evaluate the economic and global impact, respectively, of
 pursuing a federal injunction against  Microsoft. Gilbert, the economics
 deputy, was a technology buff and an expert in industrial organization and
 intellectual property issues. Diane Wood, a University of Chicago law
 professor, became deputy international affairs at the antitrust division
 in September.

 Bingaman had put together a team to take on big antitrust cases, and she
 was encouraging them to do so. Microsoft became their first major prey.
 The staff was seeking to enlarge its complaint to include violations that
 affected the applications  software market in addition to the operating
 system market - the core of the stalled FTC complaint.

 "I think the truth is, antitrust enforcement is strongly supported on the
 Hill," Bingaman said. "Big segments of the American people support it, and
 the business community generally does."

 Contrary to some reports in the press that her aggressive enforcement
 mission ran counter to Gore's information policy, Bingaman was well
 supported by the White House. "I'll tell you the truth. I've never had a
 problem with the White House at all in  any of this. This is a figment of
 the press' [imagination] to me," Bingaman said.

 At the same time, Attorney General Reno had the power to put a stop to any
 investigation or case at the antitrust division that she felt was
 inappropriate. Reno, in fact, was giving Bingaman all the resources she
 needed to succeed, including $1  million out of her own discretionary
 budget. And with the $4.7 million windfall from Congress, by early
 December Bingaman was preparing to hire about 30 new attorneys, 60
 attorney assistants, and a slew of economists. A good portion of these
 resources would be used on the Microsoft case.


 The Probable Outcome

 Back in early December, Robert Litan and section chief Richard Rosen, who
 was overseeing the group of lawyers doing all the legwork on Microsoft,
 were envisioning the case in court.

 The DOJ would not seek monetary damages from Microsoft, contrary to some
 speculation in the press. Instead, an injunction in federal court would be
 sought that would order Microsoft to stop certain behavior in the
 marketplace. Litan, Gilbert, and  the others were well aware that if the
 case went to court - that is, if Microsoft refused to sign a consent
 decree - the company would be taking a big risk. Besides having to air its
 laundry in public, if Microsoft lost, the case could pave the way  for a
 slew of private lawsuits.

 "We are not in the business of attacking concentration for its own sake or
 impeding innovation for God-knows-what reason," Gilbert said. "It's very
 much a question of: Are there combinations or practices where we have good
 reason to believe they're  interfering with innovation or delivering goods
 at the best prices? If we think that's going on, we'll challenge it."

 Basically, competitors want a level playing field. If Microsoft wants to
 disclose information, then it should disclose to all, they argue. And if
 it chooses to keep certain operating system information as a "trade
 secret," then that information  should also be kept secret from its own
 internal application developers.

 Microsoft's competitors fear that if the Justice Department does not force
 Microsoft to change its behavior in the marketplace, Microsoft will
 "leverage" its monopoly position for an advantage in new markets spawned
 by the convergence of digital  technologies. There will be new
 applications required for interactive television, for example, and Gates
 is already lining up control of that platform by putting Microsoft
 operating systems at the heart of set-top boxes and other new devices
 through  alliances with TCI, Sega, and others. If Microsoft's licensing
 policies along the digital superhighway are the same as in the computer
 industry, competitors have plenty to fear.

 Meanwhile, the staff is prepared for the following scenario: Litan calls
 Microsoft chief counsel Bill Neukom and Chairman Bill Gates into his
 office and informs them that the division is preparing to sue. They're
 offered a detailed consent order to  sign. If Microsoft refuses to sign,
 within three weeks a lawsuit would be filed by the DOJ in federal court.
 The case could take years to get to trial.

 If a consent agreement is reached, some negotiation on its terms is to be
 expected. Attorneys however, have been perusing the details of something
 called the Tunney Act (officially the Anti-trust Procedures and Penalty
 Act, approved in 1974) to make  sure that the results would not merely be
 symbolic. The Tunney Act states that the public will have a chance to
 comment on any consent decree sought by the Department of Justice.
 Basically, Tunney throws any consent order into the public forum.

 As of late January, Washington antitrust pundits were betting that
 Microsoft would sign a consent order. "Gates would have to be nuts if he
 didn't," said one Washington attorney.

 So what really happens if Gates signs? What is this whole case about,
 anyway? Won't Microsoft continue to dominate the market? In the short
 term, the answer is yes, but a "level playing field" would do much to
 allow competitors like Taligent and  even unknowns - future Microsofts -
 into the game. The result could be more competing operating systems, and a
 broader range of quality applications software as well.

 "If you essentially disable Microsoft from using its licensing provision
 to keep out competitors of DOS and DOS follow-ons, you're going to have
 more and more competitors of DOS," said a lawyer with intimate knowledge
 of the case. "Instead of just  DOS with its huge share of the market, if
 you've got three or four operating systems each having 25 or 30 percent of
 the market, you're going to provide a lot more incentive for those people
 to predisclose or disclose interface operations to  everybody." The
 reason: The OS that talks to everyone wins. That's Taligent's strategy,
 and OS/2's as well.

 Microsoft could refuse to sign, go to court, and win. Or the investigation
 could end up a political casualty, dismissed before it ever begins -
 always a possibility in fickle Washington. That's certainly the hope of
 Microsoft counsel Neukom. "We  cannot comment on why the Department of
 Justice decided to begin its own investigation of Microsoft," he states.
 "You should bear in mind, however, that the Department of Justice quite
 frequently concludes following an investigation that claims of
 anti-competitive conduct are baseless."

 Of course, there are plenty of people in Washington and elsewhere who
 would like the government to get out of the way and let markets take care
 of themselves. Washington insiders warn that when the DOJ publicly unveils
 its intentions, a political  maelstrom may be unleashed. Microsoft is
 already lobbying folks at the Commerce Department, claiming that the case
 would seriously harm the economy (What's good for Microsoft is good for
 the USA...). However, high-level DOJ sources say the solid  foundation of
 the case - born of the legal strength of the case and the relationship
 between Reno and Bingaman - is expected to withstand whatever political
 pressure may be brought to bear at the last moment.

 "I don't think (squelching the case) would really serve the economy
 because we really do need to be concerned that antitrust allows innovation
 to proceed as rapidly as possible," Gilbert said. "Which sometimes means
 being concerned about certain  types of agglomerations of power."

 "There will be positive results out of all of this," said Deputy Assistant
 Attorney General Litan about Bingaman's reinvigoration of the antitrust
 division. "Janet Reno has very much delegated antitrust [decisions] to
 Anne. The extraordinary  circumstance is if Anne would not get what she
 wanted."

 "I expect to see Bill Gates in my office very soon," he said.

                                    * * *

 Wendy Goldman Rohm is the author of a forthcoming book on Microsoft's
 antitrust struggle, to be published later this year by John Wiley & Sons,
 New York. She also is a correspondent for several international
 publications. She welcomes contact at +1  [phone], or Compuserve:
 73423,621.


 =-=-=-=-=-=-=-=-=-=-=-=WIRED Online Copyright Notice=-=-=-=-=-=-=-=-=-=-=-=

          Copyright 1993,4 Ventures USA Ltd.  All rights reserved.

   This article may be redistributed provided that the article and this
   notice remain intact. This article may not under any circumstances
   be resold or redistributed for compensation of any kind without prior
   written permission from Wired Ventures, Ltd.

   If you have any questions about these terms, or would like information
   about licensing materials from WIRED Online, please contact us via
   telephone [phone]) or email ([e-mail]).

        WIRED and WIRED Online are trademarks of Wired Ventures, Ltd.

 =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=

--
Steve Withers / Wellington, New Zealand
[e-mail]  (all night)
[e-mail] (weekly)
[e-mail] (all day)  One of these days I'll have to get a life.