Senate panel to hold Microsoft antitrust hearings

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By Patrick Thibodeau

WASHINGTON (IDG) -- In a move that some see as putting pressure on Microsoft Corp. and U.S. officials to reach a tough remedy in the antitrust case, the U.S. Senate Judiciary Committee will hold a series of hearings beginning in September that will look at the Microsoft case and competition issues on the Internet.

The plan for hearings comes as Sen. Charles E. Schumer (D-New York) was expected at a midday press conference to lambaste the integration strategy for the software giant's Windows XP operating system. Microsoft's new operating system, which is scheduled for release in October (see "Microsoft releases full-featured Windows XP for testing," link below), will integrate instant messaging, media players and other functions that critics say will hurt competition.

Congress is trying to send a clear message to Microsoft and to the Bush administration "that a toothless remedy is not going to be acceptable politically," said Andy Gavil, an antitrust professor at the Howard University School of Law in Washington. "What set of constituents is not affected by Microsoft's conduct? There is genuine interest [in Congress] in what they are doing."

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A spokesman for Sen. Patrick Leahy (D-Vermont), the chairman of the Senate Judiciary Committee, said today that the hearings "will touch on the Microsoft situation but more broadly on how best to promote competition on the Internet."

The hearings are coming at the same time that both sides are making some initial forays at settlement talks. But Congress has no direct role in a case that still faces many more court actions unless a settlement is reached, say experts.

The planned hearings are "background music," said Robert Litan, a former deputy assistant attorney general of the antitrust division at the U.S. Department of Justice (DOJ). Congress can prod the DOJ, "but it doesn't mean that the department will necessarily listen to Congress."

"Oftentimes, Congress wants to get involved because of the theater of it all," said Litan. "It's a way for them to showcase themselves." But Litan added that the moves by Congress also send a message. "If Justice settles too cheaply ... they are going to make a political issue out of this."

In a unanimous decision released last month, the U.S. Court of Appeals affirmed a lower-court ruling that Microsoft is a monopoly that broke antitrust laws. But the court rejected government claims that the company had attempted to illegally monopolize the browser market, and it left undecided the question of whether Microsoft had illegally tied the browser to the operating system. The court said the tying issue had to be examined using a standard that weighed the benefit to users (see "Appeals court reverses Microsoft breakup order," link below).

Schumer's plan to put the spotlight on Windows XP won praise from Ken Wasch, president of the Software & Information Industry Association, a Washington-based trade group that's backing the government's antitrust case, and is alleging that XP will violate antitrust law. But he also acknowledged that the role of Congress in the case "is fundamentally that of a bystander."