DOJ Decision on Microsoft Case Draws Criticism, Praise

The Bush administration's announcement Thursday that it was no longer seeking to break up Microsoft sparked accusations that the White House was reluctant to pursue legal actions against big corporations — but earned praise from those who believe the antitrust lawsuit should be resolved quickly.

Critics of the decision pointed to a similar move in June in which the Justice Department  sought to settle a long-simmering civil lawsuit against the tobacco industry.

In both cases, the White House has altered course in Clinton-era suits against large corporations, reflecting the new administration's philosophy that lawsuits are not the best way to resolve disagreements.

Just Punishment

But officials said the legal shift in the Microsoft case was not a retreat or an overture to enhance chances of a settlement. They also denied there was any involvement from the White House, where Microsoft executives have come calling in recent months. The company was also a top contributor to Republicans.

Officials said the decision was driven by a conviction that a just punishment, albeit one that involves keeping Microsoft together, could be devised to correct the illegal monopoly Microsoft maintained over the computer software market.

They suggested the government would ask the new judge handling the antitrust case to review the Windows XP software and seek a penalty that ensures the company doesn't operate as an illegal monopoly in the future.

Not everyone agreed with the administration's stance. Rep. John Conyers, D-Mich., accused the Justice Department of trying to weaken and slow down the case and questioned whether political aides at the White House influenced the decision.

Some legal experts were mystified by the administration's move, saying the government backed off on a case it was winning. "The government's litigation was in the fourth quarter, yet the Bush administration chose to forfeit the game while it was ahead," said Gordon Klein, a law professor at University of Southern California. "It was purely political."

Streamlining the Case

Others said dropping the breakup remedy and backing off charges that the software giant illegally hurt competitors by bundling a Web browser and other features to its flagship operating system will streamline the case.

"By dropping all that, they can now focus on getting some kind of relief more quickly in a fashion that will have some effect on the market," said Howard University law professor Andy Gavil.

One antitrust expert predicted the case will get even murkier because so-called conduct remedies, rather than a clean breakup, are much more difficult to enforce.

"Conduct remedies will require much closer monitoring from the government and the courts," said Norman Hawker, a finance and law professor at Western Michigan University.

Lawyers for both sides are to submit reports detailing their next moves to U.S. District Judge Colleen Kollar-Kotelly by Sept. 14. A hearing is scheduled for Sept. 21.

The Justice Department plans to ask for an expedited discovery schedule to push the case along. Officials said the department does not plan to try to stop Microsoft from marketing its new Windows XP software in the meantime.

The Justice Department is also juggling a protracted civil case against large cigarette makers to recover tens of billions of dollars spent to treat smokers covered by federal health programs.

When the department signaled in June that it wanted to settle the case, Democrats and anti-smoking groups accused the White House of trying to appease the tobacco industry, which donated millions to help the GOP last year.

A tobacco settlement is nowhere in sight, Justice Department officials told lawmakers this week. Officials said the department will continue to pursue the lawsuit.

The Associated Press contributed to this report.