April 20, 1998 5:40 PM PDT

Dole, Bork battle Microsoft

Turning up the heat on Microsoft, former Sen. Bob Dole and former appeals judge Robert Bork today joined in announcing a group that intends to lobby against the software giant for allegedly anticompetitive practices.

As reported yesterday by CNET's NEWS.COM, the "Project to Promote Competition and Innovation in the Digital Age," or ProComp, includes representatives from Netscape Communications, Sun Microsystems, Oracle, Corel, the Software Publishers Association, the Computer & Communications Industry Association, and Sabre Group Holdings, the airline reservation system controlled by the parent of American Airlines.

Others supporting ProComp are American Airlines, the American Society of Travel Agents, Knight Ridder New Media, Preview Travel, the Air Transport Association, and Sybase. "A number of other companies and organizations are also working with or supporting ProComp but do not choose to be publicly identified at this time," a statement said.

"We believe that only if there is strong antitrust enforcement can we avoid unwanted and unnecessary regulations down the road," said Mike Pettit, executive director of ProComp. "We're not asking for new laws and new regulations, but we think the time to closely examine many of these issues is now."

"ProComp is undertaking an important effort to ensure a level playing field in the software content and electronic commerce industries," Ken Wasch of the Software Publisher's Association said in a statement. "SPA strongly believes that robust competition gives new ideas and new companies the opportunity to succeed and gives consumers the full benefits of innovation in computer software."

"It's fair to say that the Internet promise has become the newest market in our economy, and access should not be controlled by any one company," Dole said. "Microsoft currently enjoys a monopoly that controls more than 90 percent of the desktop computer today."

Added Bork: "This predation [by Microsoft] violates traditional antitrust principles." In a media briefing, Bork outlined the legal evidence that supports ProComp's position. He also confirmed he was retained by Netscape. Bork wrote a well-known book about antitrust policy, The Antitrust Paradox: A Policy at War with Itself.


Appeals judge Robert Bork on The Antitrust Paradox: A Policy at War with Itself
 
"My wife gets on the Internet, but she'll have to teach me about it," Bork said. ProComp said it has been in touch with state attorneys general, who may file their own lawsuit against Microsoft. Pettit described Dole as a "strategic adviser" to the group.

"This announcement simply formalizes an anti-Microsoft PR lobbying campaign that has been under way for a long time," Microsoft spokesman Tom Pilla said. "It's ironic that Sen. Dole and Mr. Bork have joined forces with a coalition of companies who support government regulation. Today's free-market policy-makers recognize that consumers, not government regulators, should determine the future of technology."

The economic "trickle-down" effect of Microsoft's success also has benefited many companies, executives have argued. One such company is Autodesk, for example.

The launch comes one day before Microsoft and the Justice Department square off before a three-judge panel of the U.S. Court of Appeals for the District of Columbia, where Bork was a judge for years. Microsoft lawyers will argue there that a lower-court judge erred in issuing a preliminary injunction against Microsoft and in appointing a computer expert to sort through evidence in the high-profile case the Justice Department brought last October.

In December, U.S. District Judge Thomas Penfield Jackson temporarily ordered Microsoft to offer Windows operating system products separately from its Internet Explorer browser. He also named visiting Harvard Law School professor Lawrence Lessig a "special master" in the case, directing him to gather evidence and propose factual findings and legal conclusions.

The participation of Dole and Bork is significant because both are conservative leaders who gained a reputation for opposing--not supporting--regulatory intervention in the marketplace.


CNET Radio talks to CCIA's Ed Black
 
Political pundits said landing Bork was a coup because of his connections in the nation's capital.

A person involved with the group said its aim wasn't strictly to lobby against Microsoft, but rather to promote "the importance of maintaining competition as we transition to a digital economy. At the same time, the current discussion revolves around Microsoft," added the source, who spoke on the condition of anonymity.

Dole already has backed another anti-Microsoft coalition. As previously reported, Microsoft competitors such as Netscape have hired the Washington law firm of the former Senate majority leader, Verner Liipfert Bernhard McPherson & Hand. In a Los Angeles Times opinion column, Dole backed away from earlier comments he made criticizing attempts to regulate the software giant by arguing that "Microsoft cannot be allowed to use its current dominance in personal computer operating system software to preclude competition."

Bork's anti-Microsoft lobbying is new, however. Having gained a reputation as one of the more conservative and outspoken appeals judges in the nation's capital, Bork argued that reining in the software giant is perfectly consistent with the free-market ideals that, as reported, are central to two of the three judges hearing Tuesday's arguments.

The Reagan White House nominated Bork for a seat on the U.S. Supreme Court, but he failed to win congressional approval. Bork now is a scholar at the American Enterprise Institute.

Microsoft, meanwhile, has quietly been ramping up its own lobbying efforts. The company's political ammunition includes an impressive array of powerful Democratic and Republican leaders. Conservatives include former chair of the Republican National Committee Haley Barbour; Grover Norquist, who runs a group called Americans for Tax reform; and Vin Weber, a codirector of the conservative think tank Empower America, which is affiliated with former White House drug czar Bill Bennett and former Congressman Jack Kemp. Liberal support includes former Congressmen Tom Downey, a close ally of Vice President Al Gore from law firm Downey Chandler.

But some of Microsoft's efforts have backfired recently. The Los Angeles Times reported last week that Microsoft secretly has been coordinating a media campaign that was designed to plant articles commissioned by the software giant "but presented by local firms as spontaneous testimonials."

Microsoft said it was "ironic" that anyone would criticize the company for trying to air its views on competition in the software industry. All of Microsoft's competitors are "ganging up" to launch a campaign against the company, spokesman Mark Murray said last week, and it is working to counter "negative and misleading information."

The ProComp launch was organized by Powell Tate, the public affairs powerhouse headed by former press secretaries Jody Powell of the Carter administration and Sheila Tate of the Reagan White House. "The firm is a prototype bipartisan public relations operation that...has been at the forefront of almost every public affairs battle in Washington over the past few years," according to PR Central, which follows the industry.

Anti-Microsoft lobbyists have been intensifying their efforts against the software giant. On April 10, for example, the SPA sent a letter to Joel Klein, assistant attorney general in charge of the Justice Department's antitrust division, to complain about alleged restrictions placed on computer makers in connection with the licensing of Windows 98. Specifically, the letter took issue with the "first boot" requirement that allows Microsoft to control the content end users first see when they turn on their computers.

"These restrictions have nothing to do with the functionality of the operating system and serve as a type of tying arrangement that decreases consumer choice and provides Microsoft with a stream of income in other products and services as a condition for licensing Windows 98," the letter charges.

"Relief from the 'first boot' restriction is absolutely necessary to restoring competition in the computer, software, and electronic commerce industries," the letter continues. "We hope that this issue will be addressed in any Sherman Act case the Justice Department may bring related to competition in our industry."

Pilla dismissed the letter. "We have a long history of providing innovative products and technologies based on what we learn from listening to our customers," he said today. He added that the formation of ProComp should come as no surprise.

Rose Aguilar contributed to this report.

 

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