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Next U.S. president unlikely to touch Microsoft case

If the software giant is to succeed in having its antitrust judgment overturned, it must rely on the appeals court and not the court of politics.

    WASHINGTON--If Microsoft is to succeed in having its antitrust judgment overturned, it must rely on the appeals court and not the court of politics.

    The next U.S. president is not likely to come to Microsoft's rescue after November's elections, even if there is a sweeping Republican victory, say legal experts.

    In a stunning defeat yesterday, Microsoft lost its lengthy antitrust battle with the Justice Department and 19 states when U.S. District Judge Thomas Penfield Jackson ordered the company split in two. Microsoft now must rally its forces--whether they be legal or political--to prevent the divestiture.

    Speculation has run high that Microsoft would mount a massive political assault in hopes of winning favor with the next administration, but the software giant is unlikely to take such action or succeed if it did, say legal experts.

    "It would be extraordinary in the annals of antitrust--unprecedented--for an administration to intervene in an antitrust case for political reasons or based on political motivations," said Glenn Manishin, an antitrust attorney with Patton Boggs in McLean, Va.

    An administration run by Vice President Al Gore would be unlikely to veer sharply from the current White House. And while statements by presumptive Republic candidate George W. Bush's position would seem to favor less harsh treatment of the software giant, campaign statements and actions as president are entirely different situations, Manishin said.

    "Candidates like George W. (Bush) may sometimes make statements that they don't like antitrust, but when they get to be president, they want to keep a hands-off policy because they know it's too much of a hot potato economically," he said.

    If the Bush administration rallied to support Microsoft, it could face an unwelcome backlash on a number of fronts--19 of them to be exact. "Even if Bush wins and is favorable to Microsoft, there are 19 state attorneys general to deal with," said Rich Gray, an intellectual property attorney with Outside General Counsel Silicon Valley in Menlo Park, Calif.

    "Politically, it would be difficult for a Bush White House to walk away from a stunning trial victory while being snipped at by state attorneys general," he said.

    If the Bush administration were to succeed at magically making the federal antitrust case disappear, the 19 states could continue Special coverage: Breakupindependently to fight for the judgment Jackson handed down yesterday.

    Microsoft's position is that competitors have misused the political process to drive forward the antitrust case, while it plans to reserve the bulk of its efforts for the appeals process. The company started the process by filing a motion to stay conduct restrictions that go into effect in 89 days.

    "We think it is very unfortunate that our competitors are trying to work the political system against Microsoft," said company spokeswoman Mary Murray. "We will try to tell our side of the story to policy-makers, but we believe this case will be resolved where it should be, and that's in the courts."

    That is not to say Microsoft is not mounting an increasing presence in Washington and state capitals across the country. But the company is learning that politicians' assurances of support do not always lead to political action.

    "Companies like Microsoft learn quickly politicians are happy to take their contributions and rally sabers on your behalf, but don't plan on their ruffling political feathers for your sake," said one Washington activist who asked not to be identified.

    That has been a hard lesson for the software giant, which has rallied vocal support for its antitrust problems but little else.

    Two days after Jackson ruled Microsoft violated two sections of the 1890 Sherman Act, chairman Bill Gates met with politicians in a Washington visit. Gates met with a number of Republican senators, including Slade Gorton (Wash.), Phil Gramm (Texas), Trent Lott (Miss.), Mitch McConnell (Ky.) and Don Nickles (Okla.), among others.

    Gates also chatted with Republican House leaders, who demanded calling Assistant Attorney General Joel Klein to an accounting of Microsoft's prosecution the following week. But the politicians did little more for the software giant.

    "If they were going to help Microsoft, they would have done so earlier," Manishin said. "You don't intervene when a case is over and on appeal because you're just too blatantly trying to reverse a judgment of guilt."

    Even the Bush camp found it prudent to back away from the case. Bush entered the trial spotlight in April, when campaign strategist Ralph Reed admitted he erred in lobbying the presidential candidate on Microsoft's behalf.

    Microsoft's best strategy, besides its appeal, may be to whip up public support for its cause, particularly as the election year builds momentum, said the Washington activist.


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    John Smith, an antitrust attorney with Nixon Peabody in Washington, believes the "election could be a referendum on relief." Consumer outcry against breaking up Microsoft during the election might lay the groundwork for the next administration to step in on the company's behalf, he said.

    "If in fact there is a new administration that says, 'as a matter of public policy (we) do not believe that what happened here justifies breaking up the company that has led the American economy for over 10 years, and we are not convinced this will help consumers,' the whole political landscape changes," Smith explained.

    But Gray isn't so sure, nor is he convinced that Bush's being a Republican makes him all that sympathetic to Microsoft's plight.

    "While a Bush victory might apparently change the political equation in favor of Microsoft, it's not certain the outcome," he said. "It depends on who the attorney general is. Let's not forget that it was a Reagan-led administration that broke up AT&T."