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."