New antitrust rules for cyberspace?

As the Department of Justice case against Microsoft moves forward, critics of U.S.

As the Department of Justice case against Microsoft moves forward, critics of U.S. antitrust policy are increasingly complaining that the laws are outdated and irrelevant in the age of intranets and operating systems.

After all, they quip in countless sound bites, the Sherman Act-the granddaddy of antitrust policy-was drafted during the days of smokestacks and steam engines. It's an increasingly popular theme though many antitrust experts maintain such criticism misses the mark.

"That's like saying the Constitution isn't relevant because it was written for 13 colonies in 1797," Rich Gray, an antitrust attorney at San Jose, Calif.-based Bergeson, Eliopoulos, Grady & Gray said.

The Sherman Act, only four pages long, is quite elastic, molded by each new court case to adopt to the changing business atmosphere in the U.S. The guiding principles of the act-those that prohibit abusive monopolies, price fixing, and the like-are as relevant today as they were eighty years ago, many antitrust attorneys said.

"It's a very flexible doctrine," Mark Lemley, an associate professor of antitrust at University of Texas School of Law. "It's adapted to a whole variety of industry and technology in the past. There's no reason to think it won't adapt in the future."

For example, he said, if the DOJ were to file an expanded antitrust suit against Microsoft, as some suspect it will, the agency would investigate whether the company violated the basic tenets of the Sherman act and willfully abused its monopoly.

But that hasn't stopped some legislators from jumping on the antitrust reform bandwagon. Utah Senator Orrin Hatch, the chairman of the powerful Judiciary Committee said last week he prefers antitrust action to heavy regulation. But in the same breath, he suggested that Microsoft and its competitors get together to "develop a set of antitrust principles for this digital age."

Hatch's argument has yet to translate into legislation, one route of changing the law, but many are skeptical.

"It's extremely hard to see how it would be done in the real world," Gray said, though he called it "an intriguing idea."

The Department of Justice or the Federal Trade Commission also could clarify the law by issuing guidelines on how it plans to interpret antitrust acts with regard to technology. The government did that in 1995, when it outlined how the laws would cover intellectual property.

Still, antitrust experts agree that the fast pace of the technology world puts a wrench in the antitrust enforcement chain. Increasingly, disputed technology becomes irrelevant before a case even makes it to court. As a result, many experts expect more consent decrees and government-issued guidelines and fewer drawn-out court cases as trustbusters race to flex their muscles.

Already the Microsoft-DOJ case is moving at what one lawyer called "greased lighting speed." But there's a drawback to speedier alternatives like consent decrees, which are basically a settlement between a company and its adversaries, said Warren Grimes, a professor at the Southwestern University Law School in Los Angeles and a former FTC attorney. "They can only get Microsoft to do in a consent decree what Microsoft agrees to do by consent," he said.


You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All