April 6, 2000 10:00 AM PDT

Justice Department to defend Microsoft prosecution

WASHINGTON--Assistant Attorney General Joel Klein next week will testify before a congressional committee to defend the Justice Department's prosecution of Microsoft, a judiciary committee source said.

The routine hearing, which the House Judiciary Committee had postponed from January, puts Klein and the Justice Department (DOJ) in the hot seat just days after a ruling in the Microsoft trial and a controversial Washington visit by Microsoft chairman Bill Gates.

On Monday, U.S. District Judge Thomas Penfield Jackson ruled largely in favor of the government in the antitrust case brought by the DOJ and 19 states. Jackson found Microsoft to be a dangerous and aggressive monopoly that used anticompetitive means to preserve its Windows franchise.

Gates, who yesterday came to town at the request of the White House, also met with congressional leaders who gave him a warm reception and expressed their outrage about the DOJ's prosecution of the Redmond, Wash.-based software maker.

Following a meeting between Gates and House leaders, House Republican Conference chairman Rep. J.C. Watts, Jr., of Oklahoma issued a statement lambasting the DOJ's prosecution of Microsoft. He accused federal trustbusters of "using tired old tactics instead of focusing on the emerging field of technology in the new economy. The Justice Department has demonstrated that, with one major decision, they can send the entire world's economy into total disarray."

see special coverage: The verdict is in Watts is expected today to send a letter to Attorney General Janet Reno regarding the DOJ's prosecution of Microsoft, said a source familiar with the matter.

Microsoft spokesman Jim Cullinan said the Washington visit "had been planned for weeks" and Gates was "there by invitation of the White House." But the Microsoft chairman also used the trip to rally support among conservative lawmakers on Capitol Hill.

At the invitation of Sen. Slade Gorton (R-Wash.), Gates yesterday met with a number of Republican senators, including Phil Gramm (Texas), Trent Lott (Miss.), Mitch McConnell (Ky.) and Don Nickles (Okla.), among others.

Gorton on Monday defended the software giant from his home state by slamming the DOJ for prosecuting Microsoft. "The verdict sets a dangerous precedent--now the government will be able to pick tomorrow's winners and losers in the high-tech industry," he said in a statement. "The federal government is stifling the tremendous job growth and innovation taking place in our high-tech sector."

The meeting, which lasted about 15 minutes, had been scheduled in advance of Jackson's ruling to coincide with Gates' Washington visit.

Following the meeting, some senators discussed a further investigation of the DOJ's prosecution of Microsoft but made no formal plans to do so.

"The idea of further investigating Microsoft is an idea that's been bantered about, but it's not much more than a concept at this point," said John Czwartacki, press spokesman for Senate Majority Leader Trent Lott.

Czwartacki said "no conversations have taken place nor any jurisdictional questions have been answered" about which committees might take on the task. But he emphasized nothing has "formally occurred and it's hard for me to put a prognosis on it."

Sources in the Senate said the House might be more likely to pursue additional hearings into the DOJ's antitrust case because of the influence of Sen. Orrin Hatch (R-Utah), who chairs the Senate Judiciary Committee.

Two major Microsoft rivals, Caldera and Novell, have headquarters in Utah.

"Sen. Hatch had assured Joel Klein he would watch his back if he pursued the case against Microsoft," said a Senate source. "But given the economic impact of the decision, I am not sure he can pull it off, at least in the House, where he doesn't have as much influence."

George Washington University Law professor Bill Kovacic bristled at the idea that congressional leaders might call for hearings beyond the routine oversight process.

"Holding hearings to examine the decision to prosecute in an ongoing case is very bad policy," said Kovacic. "To hold special ad hoc proceedings to target a specific case becomes an invitation for corporate defendants in all types of matters to intervene in the prosecution of cases that adversely affect their interests."

 

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