- The Washington Times - Friday, June 29, 2001

The Justice Department likely will seek an out-of-court settlement of the remaining charges in its antitrust lawsuit against Microsoft, levying sanctions that will be mere "slaps on the wrist," economic analysts said yesterday.

The federal lawsuit was brought against the software giant by the department's Antitrust Division under the Clinton administration, but President Bush made clear in his campaign that he did not support the action and would be reluctant to litigate such cases in the future.

"I think it's over. The president made some pretty strong statements earlier that he did not want to pursue the case against Microsoft. The betting around here is that there would not be much in the way of sanctions," said Barry P. Bosworth, an economist at the Brookings Institution.

"There may be some pressure in the Justice Department because some of the career lawyers may try to salvage something out of the whole package, but I think it's dead," Mr. Bosworth said.

This was the view of other analysts after the Court of Appeals ruling yesterday that reversed U.S. District Judge Thomas Penfield Jackson's order to break up Microsoft because of monopolistic practices.

The administration could appeal the decision finding that Microsoft engaged in illegal actions to maintain its monopoly, but few antitrust analysts believed that it would.

"The Justice Department is highly likely to want to put this behind them," said Robert A. Levy, a legal analyst at the Cato Institute.

"The remaining charges against Microsoft of monopolistic activity are likely to warrant remedies that are in my view not much more than slaps on the wrist. And the department may very well feel that they can accomplish that in settlement negotiations more quickly and efficiently than they can in a courtroom," Mr. Levy said.

But the ruling may have deeper economic and political developments that the Bush administration would welcome.

Some economists thought that the antitrust lawsuit was a factor in the decline of the technology sector and led to a battering of the software company's stock, a major component of the Dow.

A decision by the Justice Department to reach a settlement would send a strong signal to the business community generally, and the technology sector in particular, that "this administration is business friendly and will not be needlessly dragging our most successful companies into court," said an economist who advises the administration.

"I wouldn't expect the Bush Justice Department to look hard for new antitrust cases," said Robert W. Crandall, a Brookings economist.

"With certain clouds on America's economic horizon, the last thing our workplace needs is the threat of continued legal action against successful companies that can brighten this horizon," said John Berthoud, president of the National Taxpayers Union.

The decision had political implications, too. President Clinton aggressively courted the high rollers in the technology industry for campaign contributions, and some thought he rewarded Microsoft's enemies with the lawsuit. Mr. Bush has raised a lot of money in Silicon Valley as well.

"The political implications are that Microsoft's competitors and Microsoft itself will be on notice that you cannot go running around Washington currying favor with politicians as a means of accomplishing what you could not accomplish in the marketplace," Mr. Levy said.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide