From free-market zealot to Microsoft policeman
By Dan Goodin
Staff Writer, CNET NEWS.COM
WASHINGTON--As Capitol Hill's lightning rod for criticism of Microsoft, Sen. Orrin Hatch (R-Utah)
seems slightly out of place.
Throughout his four terms, the conservative senator has railed against
governmental regulation and sung the praises of an unfettered free market.
But Hatch draws the line when it comes to the
Redmond, Washington, software giant. An attorney before coming to
Washington, Hatch argues that Microsoft "is clearly a monopoly...and will
have to learn to live by the rules that govern monopolies," and regularly
praises the Justice Department for its
ongoing legal action against the company that made "operating system" a
Hatch's activist stance on Microsoft has raised a few grumbles among his
fellow Republicans, but so far none loud enough to get much notice. For the
most part, few of Hatch's colleagues on either side of the congressional
aisle have taken much of a stand on allegations that Microsoft uses
anticompetitive measures to promote its products. Their indifference--or
perhaps ignorance--has left Hatch, who chairs the powerful Senate Judiciary
Committee, front-and-center on the issue of whether Microsoft wields
The latest round of criticism leveled at Microsoft came at a
four-and-a-half-hour hearing held by the Judiciary
"Market Power and Structural Change in
the Software Industry." The session was attended by chief executives Bill Gates of
McNealy of Sun Microsystems, Jim
Barksdale of Netscape
Communications, and Michael Dell of Dell
The high-profile hearing drew more cameras than any other event in
Senate history. It also came with its share of tense moments. One arose
when comments seemed to contradict Dell's assertion that customers can,
upon request, purchase computers with Netscape Navigator preinstalled.
Another came when Hatch asked Gates repeatedly whether Microsoft in any way
restricts its partners from promoting Netscape's products. Gates eventually
conceded that, in some circumstances, it does.
CNET's NEWS.COM caught up with Hatch in his Senate office two days after
the hearing. Exhausted from all the hubbub, he demonstrated a
working knowledge of the software industry, and explained why he is
devoting so much energy to policing Microsoft.
NEWS.COM: You're known as a senator who adamantly opposes government
private enterprise. Why are you so supportive of the Justice Department
policing Microsoft? Isn't that just another example of burdensome government
HATCH: Well, I don't look at the Justice Department's policing of Microsoft as
governmental interference. It's whether or not the antitrust laws should be
enforced, and whether or not Microsoft is using its control of the desktop
operating system to basically annihilate other companies, or put them out of
business, or make it impossible for them to do business--and thus stifle
competition, innovation, and continued growth in the industry. I don't
think the Justice Department is trying to regulate. I think what they're
trying to do is enforce antitrust law.
You've participated in a lot of high-profile Senate hearings during your
four terms. I don't believe any of those have delved into the often arcane
issues that are raised by antitrust laws or the high-technology industry.
Was your committee's hearing historical?
It was historical because this is the first major, major hearing involving
actual icons of
leadership in the field of intellectual property vis-a-vis the Internet,
the whole computer industry, and, of course the dissemination of knowledge
through the computer communications devices of the high-technology industry.
What is the most significant thing that came out of the hearing?
Well, first I think that the hearing and our discussion leading up to the
hearing directly led to Microsoft's decision to stop limiting Internet
service providers from distributing Netscape products. So it was a very,
very important hearing from that standpoint. This is a significant
development that will return consumer choice.
Also, there were certainly more indications that
Microsoft has put some
form of pressure on computer makers not to offer Netscape as a choice, and
we saw some indications of that in Mr. Dell's statement to the country,
which was, quite frankly, not very credible given what his salespeople have
told us. Even if Mr. Dell concedes that Microsoft has given Dell some
incentive to give Internet Explorer an advantage over Netscape, I think his
testimony kind of indicated that was true.
I think there was strong testimony to the effect that Microsoft clearly is
a monopoly. Now, they have a right to be a monopoly--they earned that
right. But they don't have a right to exploit the monopoly to reduce
competition or to violate any other aspects of antitrust law. I think that
[ New Enterprise Associates venture capitalist Stewart Alsop] put
his finger on it when he said that Microsoft got where it is today by being
tough and scrappy and exploiting its power to the fullest. But now that
they do have a monopoly--and I think almost anybody would conclude that
they do--they will need to change this culture to learn how to abide by the
established limits on the use of monopoly power.
And what is your particular role, and the role of the Senate Judiciary
Committee in general, in helping to enforce these rules that you're saying
Microsoft as a monopolist must live by?
Well, ours is the role of the Oversight Committee. We have oversight of all
antitrust issues in the country, and certainly this is one of the issues
that probably is more important than almost any in the country today. It's
providing literally tons of jobs, and, of course, has established the
United States as the world leader in the high-tech industry. So it's very
important that we overview the criticisms that have been coming our way.
Now, we also found, in getting into the Microsoft matter, that there were
many companies who were afraid even to comment--afraid even to talk about
it--and that started to concern us, too. Part of that comes from the
nondisclosure agreements that Microsoft has obtained from its clients, and
part of it comes from the fact that they're just worried to death that
Microsoft might turn on them and make it more difficult for their
businesses to survive.
NEXT: The politics of keeping a giant in check