Klein defends antitrust case in congress

Testifying before a Congressional committee, Joel Klein, the Justice

Department’s chief antitrust law enforcement agent and driving force behind

the Microsoft antitrust case, said his office will ask for tough sanctions

against Microsoft to ensure the company will not be able to engage in

anti-competitive practices.

The Justice Department has until May 24 to determine what punishment the court

would impose upon the world’s leading software publisher. Klein said the

option of asking for a break-up of Microsoft into two or more smaller entities

remains one of the options, as well as forcing Microsoft to publish the source

code for its Windows OS or charging uniform prices to all customers.

Klein denied reports published in major U.S. print media that the Justice

Department and the 19 states that joined the antitrust lawsuit, have dropped

plans for a break-up. "We are considering a variety of options. People

may try to speculate, may try to spin us, or may try to lean on us. But we are

going to do our job,'' Klein told members of the House Judiciary Committee on

antitrust enforcement oversight. Continued concerns over the outcome of the

case and reports of slowing demand for personal computers have sent Microsoft

shares tumbling to less than $80 a share. In the past three weeks, the company

has lost nearly 40 percent of its market value, equal to $200 billion worth of

shareholder equity. Bill Gates’ fortune has "dwindled" to less

than $60 billion and he may soon lost his stature as the world’s richest man

to former partner Paul Allen who is less invested in Microsoft.

During his testimony before the Senate Judiciary Committee, Klein was

criticized by Texas Republican Joe Scarborough, who accused him of acting as a

front man for disgruntled Microsoft rivals rather than consumers. Klein shot

back that protecting a handful of companies from Microsoft’s competitive

might was not driving the case. As an example Klein cited the 1996 Justice

Department approval of the acquisition of WebTV by Microsoft. Six companies

had asked the DoJ to intervene in the transaction, which they felt would

threaten their existence.

Klein also came under fire from other Republicans who met with Microsoft chief

Bill Gates less than 48 hours after Judge Thomas Penfield Jackson declared

Microsoft guilty on a variety of antitrust charges. Republican Senator Joe

Scarborough of Florida said he strongly disagreed with Klein and the Justice

Department over the prosecution of Microsoft. "If you looked at the

polls, a majority of consumers in America disagree with you (Klein), and they

believe that Microsoft is in the right here. I just don't understand how you

make the argument that it's so horrible for consumers and the industry when

the industry has exploded.''

Klein found more support among Democratic Senators, some of who suggested that

Republicans might be trying to use their leverage to help Microsoft in return

for getting campaign contributions. "We hope that there will not be those

that will be using this case as a fund-raising cash cow, or attempt to

intimidate the department's law-enforcement efforts,'' said John Conyers of

Michigan, the highest-ranking Democrat on the Senate Judiciary Committee.

Committee chairman Henry Hyde, an Illinois Republican urged both sides to let

the case play itself out in the courts. "Everyone would benefit from a

toning down of the rhetoric, and a greater faith in the court system to come

to the right resolution."