Congressman Says Break Up Microsoft If Guilty
Alexander Gusak
(10/05/99, 5:15 p.m. ET)
By Reuters
WASHINGTON, D.C. -- Tom Campbell, a U.S. congressman and expert in antitrust
law, said on Tuesday that if Microsoft is found liable in its landmark
antitrust case it should be broken into pieces.
Campbell, a Republican from California's Silicon Valley and a professor at
Stanford Law School who sometimes teaches antitrust, said he was not
prejudging the outcome of the Microsoft case. But Campbell said he had
thought about what should happen if the judge did find broad liability.
"The only remedy that makes sense is structural," Campbell said in an
interview. "That is, to separate the operating system from the software
development."
Campbell said he would also be open to hearing arguments on breaking up the
company into two or three identical pieces, although he was less certain
that would be workable.
The Justice Department and 19 states have alleged that Microsoft holds and
has abused monopoly power in the market for its Windows operating system
that runs PCs.
The government alleges that Microsoft has used its monopoly power to cling
to its monopoly and to expand it to other areas of business. Microsoft
argues that it is not a monopoly.
The Justice Department reached an agreement with Microsoft in 1995 that was
supposed to solve supposed abuses. But in 1997, the government went to court
and charged Microsoft had violated the agreement.
Campbell said, "Any conduct remedy can be easily evaded." One way to make a
conduct remedy work is to apply close oversight, but Campbell said that was
a bad alternative.
"I don't want a federal court or, heaven forbid, an Internet Commerce
Commission" overseeing Microsoft, Campbell said.
Campbell said that no one can know the extent of Microsoft's liability, if
any, until District Judge Thomas Penfield Jackson issues his "findings of
fact," which may come as soon as thismonth.
If Jackson determines Microsoft's business practices are broad violations of
the antitrust law, then Campbell said it would be appropriate to hold a
remedies hearing to explore what should be done.
Two analysts held similar views in interviews last month. They said it would
be preferable to break up Microsoft, rather than regulate it.
"Significant regulation makes investors get real nervous real quick," said
Erik Olbeter, a senior Internet analyst for the Schwab Capital Markets and
Trading Group in Washington, D.C.
Steve Shepich of Olde Discount agreed and said heavy regulation "would be
bad for the industry."
Olbeter said that, in contrast, markets would be "able to figure out very
quickly the value of a divestiture."