Next President a Key for Microsoft

By GLEN JOHNSON, Associated Press Writer

WASHINGTON (AP) - The state and federal governments have won the first round of their antitrust case against Microsoft, but with years of legal appeals anticipated, who the new president is could change how the case is resolved.

Texas Gov. George W. Bush (news - web sites) has signaled he would be more friendly to the company. Vice President Al Gore (news - web sites) generally has stayed silent.

There is precedent for a new administration changing course in a major antitrust case: In 1982, the year-old Reagan Justice Department threw out a case against IBM that had lingered since 1969.

But since there are 19 states also listed as plaintiffs in the case, legal scholars say the next president wouldn't affect the case as much by throwing it out as through his selection of justices to the Supreme Court, where the case may ultimately be settled.

Bush and Gore, the presumed Republican and Democratic presidential nominees, already are talking about how replacing possible retirees on the nine-member court could affect the legality of abortion.

``If the question is `Could the outcome of the election have an impact on the case?' the answer is yes. But it is less because of the control over the Justice Department and more because of the control over the Supreme Court,'' said Bill Kovacic, a professor at the George Washington University Law School.

Last Monday, U.S. District Court Judge Thomas Penfield Jackson ruled that Microsoft violated the Sherman Antitrust Act by bundling its Internet Explorer Web browser with its Windows operating system software.

Microsoft pledged to appeal, but Jackson could undercut that approach by sending the case directly to the Supreme Court.

Legal experts say slowing down the case is to Microsoft's advantage for a variety of reasons, not just the possibility of having it reversed on appeal or by the Supreme Court.

The longer the delay, ``The better chance there will be that technological change will reinforce Microsoft's argument that there's no need to take drastic action,'' said Robert Litan, a former Justice antitrust official now at Brookings Institution in Washington.

Warren Grimes, an antitrust professor at Southwestern University School of Law in Los Angeles, noted that the president elected in November also will appoint a new attorney general and a different antitrust chief.

Those appointees could bring a different opinion of the case to the Justice Department.

The IBM lawsuit, filed the last business day of the Johnson administration in January 1969, was subsequently dropped in January 1982 by President Reagan's new antitrust chief, William Baxter.

``When one looks at the IBM example, it was the combination of a change in administration and a new antitrust chief and the passage of time,'' Grimes said. ``The case had less punch in 1982 than it did in 1969.''

Meeting with congressional Republicans last week, Microsoft Corp. (NasdaqNM:MSFT - news) Chairman Bill Gates was asked if a new administration would make a difference in the case. ``Probably yes,'' lawmakers quoted him as saying.

In a speech to the American Bar Association's annual antitrust meeting on Thursday, Joel Klein, chief of the Justice Department's antitrust division, said the case should remain free of politics.

``If Americans are to have confidence in our legal system, the laws must apply to everyone,'' he said. ``Politics can have no place in the enforcement of antitrust laws.''

President Clinton has said little about the case, although a spokesman said last week he may seek a briefing from Justice.

While Gore has broken ranks with the president on several recent occasions - most notably over the handling of the Elian Gonzalez custody case - he, too, has remained quiet on Microsoft.

In November, he visited the company's Redmond, Wash., headquarters and said stern antitrust action sometimes is needed to break up ``unhealthy concentrations of power'' that snuffs out competition.

The vice president stressed, however, that he was speaking only of his belief in the ``fundamental American value'' of making sure that neither heavy-handed government nor unfair business practices quash competition.

On Friday, a Florida woman asked Gore to comment on the judge's Microsoft ruling. He replied: ``It is being handled according to due process of law. ... It is an ongoing legal proceeding where they are determining the potential remedy for the finding of the court, and I don't think that it's proper to comment while that's under way.''

While Bush has begged off the question in recent days, he did say Tuesday: ``I wish there had been a settlement early on in the case. I was hoping there would be an agreement between the two parties.''

During a February stop in Seattle, Bush also indicated support for the company's position.

``I'm not going to comment on the particulars of the Microsoft suit, but as president, the question should be innovation as opposed to litigation,'' Bush said.

``I am unsympathetic to lawsuits. You can write that down. I am worried about the effect of lawsuits on job creation,'' he added. ``If you're looking at the kind of president I'll be, I'll be slow to litigate.''