Washington Times-April 13, 2000
Microsoft's friend in need
By Donald Lambro
One of the most underreported developments in the Microsoft
case is the news that Bill Clinton wants to be briefed on the
Justice Department's recommendations in the penalty phase of the
antitrust action.
Mr. Clinton's request was made public shortly after he and
Microsoft's Bill Gates met at a White House technology conference
last week. Did Mr. Gates and Mr. Clinton talk about the immense
harm that court-imposed regulations would have on the successful
software giant and on the high-tech industry as a whole?
A Microsoft official told me Mr. Gates "never had any
private time with the president" while he was here. But it is
known that Mr. Clinton has raised concerns with top advisers
about the potential for another plunge in the financial markets
if the penalties sought by the department's antitrust attorneys
go too far in attempting to stifle Microsoft's freedom to
innovate, promote and sell its software products.
Mr. Clinton's deputy general counsel and chief fixer, Bruce
Lindsey, has said that if the case were settled, "We would be
entitled to be involved" in discussions. Mr. Lindsey said the
president's participation would be justified because it would
involve "policy decisions." Now he has extended that to the
penalty phase of the trial.
But Mr. Clinton knows there is much more riding on this case
than just antitrust policy. There is Al Gore's presidential
campaign and the need to keep the economy humming along smoothly
for the next seven months to help pave the way for his election.
An economic downturn or a loss of confidence in the financial
markets — whose phenomenal growth has been driven by the
high-tech sector — would hurt Mr. Gore's chances in what is
shaping up to be a tight election.
Thus, look for Mr. Clinton to intercede in the case to rein
in the antitrust zealots, insiders tell me. Mr. Clinton cannot
afford to risk a severe penalty against Microsoft that could
trigger another sharp sell-off in tech stocks and could cause a
severe reaction throughout the wider financial markets. Clinton
advisers tell me he worries that the anti-free-market
trustbusters at Justice "could go too far."
Another try at a settlement is also a possibility, with Mr.
Clinton pushing both sides to come together for one more attempt
to reconcile differences — and perhaps putting pressure on the
Justice Department to cut a deal.
While Mr. Clinton was signaling he has no problems playing
politics with antitrust decisions, Republican strategists and
technology-industry leaders — including Mr. Gates — were
surprised and disappointed by George W. Bush's anemic,
middle-of-the-road statement in the wake of last week's court
ruling.
It is well-known that Mr. Bush opposes this case, yet he
refused to say so forthrightly. Last week, he issued a terse,
two-sentence statement that said it would be "inappropriate to
discuss the specifics" of the case while it is pending before the
court. Worse, he added that as president he would "fully enforce
antitrust laws to foster competition."
That Mr. Bush, a harsh critic of government regulations of
the economy, would embrace the antiquated 110-year-old Sherman
Antitrust laws, which are desperately in need of reform, is a
mystery. It is also a clue he is not getting the kind of
politically adept economic advice he needs in these matters.
"I wish he would have taken a stronger position," said
Jonathan Zuck, head of the Association for Competitive
Technology, which represents 9,000 high-tech companies.
Wall Street economist Larry Kudlow, who advises many GOP
candidates on economic policy, was similarly disappointed by Mr.
Bush's statement. This was a chance for Mr. Bush to stake out his
differences on economic policy with the Clinton-Gore
administration, and he did not seize it.
"There's a huge wedge issue here for Bush, if he's true to
his instincts and makes the case against anti-consumer and
anti-growth and anti-stock-market trustbusting," said Mr. Kudlow
— who should be on Mr. Bush's team of advisers, but hasn't been
asked.
But while Mr. Bush and his campaign were refusing to say
anything critical about the case last week, some of his closest
aides were telling me Mr. Bush would never have permitted this
case to go forward, and that if he is elected president he will
"drop it."
"This is not a case he would support as president," a
political adviser to Mr. Bush told me.
Said another economic and legal adviser to the Texas
governor: "If this was still on appeal by the time he came into
office, and had not reached the Supreme Court, I think he would
do what happened in the IBM case. I think the suit would be
dropped."
The Justice Department's antitrust suit against IBM was
dropped soon after Ronald Reagan took office. Mr. Bush's advisers
say he would do the same.
Mr. Bush's hostility toward trial lawyers and government
lawsuits is well-known. Earlier this year, he told a campaign
audience in Seattle, which is close to Microsoft's headquarters,
that he thinks "government regulation through litigation" is bad
economic policy.
"I am not sympathetic to lawsuits. Write that down," he told
reporters at the time. "I worry about [the effect of] lawsuits on
job creation. If you are looking for the kind of president I will
be, I will be slow to litigate."
Mr. Bush needs to restate that position now. The high-tech
industry needs to be reminded that he is on their side in this
case, and that Al Gore is with the antitrust zealots who are
persecuting one of the most successful companies in American
history.
Donald Lambro, chief political correspondent of The Washington
Times, is a nationally syndicated columnist.
##
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