DoJ's Klein grilled over Microsoft

House Judiciary Committee members had lots of questions for DoJ antitrust head honcho Joel Klein. And Klein had plenty of answers
Written by Mary Jo Foley, Contributor on

It may have been a routine antitrust oversight hearing, but most of the House Judiciary Committee members in attendance had one thing on their minds: Microsoft.

House representatives peppered the star witnesses -- Assistant Antitrust Chief Joel Klein and, to a lesser extent, Federal Trade Commission Chairman Robert Pitofsky -- with questions on the ongoing federal antitrust investigation of Microsoft. But neither official offered new details on any cases, including the Microsoft matter, that are in active litigation.

Judiciary Committee Chairman Rep. Henry Hyde, R-Illinois, opened the two-hour hearing Tuesday morning by reminding attendees that the committee had not scheduled the hearing "in response to any specific event."

But Hyde was quick to add that in the Microsoft matter, "everyone would benefit from toning down the rhetoric."

Ranking committee member Rep. John Conyers, D-Michigan., for his part, launched into a full-fledged defense of the US Department of Justice's role in the Microsoft case. Conyers didn't hesitate in criticising the way politics has overshadowed law in the week since Judge Thomas Penfield Jackson issued his findings of law in the Microsoft trial.

Without naming Texas Gov. George W. Bush, Conyers criticised one presidential candidate's public position that, if elected, he would attempt to derail the Microsoft antitrust case.

Conyers also made a thinly veiled reference to Microsoft's recently launched television and newspaper ad campaigns designed to build public support for the company. He told Klein and Pitofsky that he hoped they would not let "advertising wars" influence their positions.

"I don't want to see this case using big money in the middle of a judicial campaign. It's not a pretty sight to witness," Conyers said. "Big money should stay out of this process."

Klein responded that he agreed with Conyers' position. "Law enforcement shouldn't be a partisan matter," Klein said. "America's economy is the greatest because it's the most competitive."

Other representatives were more adversarial toward Klein and questioned combatively the DoJ's ongoing Microsoft investigation.

Microsoft Rep. George Gekas, R-Pennsylvania, asked Klein for proof of consumer complaints leading to the DoJ's investigation of Microsoft. Gekas said he personally had received as many as 15,000 constituent complaints in the past on a single matter, but in terms of Microsoft, "I have received none."

Klein responded that while he could not divulge the confidentiality of those who came forward, Justice's suit was based on a "lengthy investigation" instigated only after many people came forward.

But Klein added that complaints alone do not necessarily lead to an antitrust investigation. He noted that the DoJ is not "singling out companies for target."

"Right before this (Microsoft antitrust case) we conducted a lengthy investigation of MSN (Microsoft's Internet service)," Klein said, "but we chose not to pursue that."

In response to a question on the extent of cooperation between the DoJ and 19 state attorneys general in the Microsoft matter, Klein characterised the collaboration as working "effectively and well." Klein acknowledged that "their views are not always the same as ours," but he noted that the two groups were still hopeful that they would be able to put forth a single, joint-remedies proposal by April 28, the date Judge Jackson has requested the plaintiffs to submit their remedies document.

Klein reiterated, in response to a question from Rep. Steve Chabot, R-Ohio, that the DoJ still had not ruled out the slim chance of settlement.

"Effective settlement is always preferable," Klein told hearing attendees. "We're prepared to (try) to do so again, but it would need to address the court's findings if there were a settlement."

Rep. Joe Scarborough, R-Florida, made it clear during the morning's proceedings that not every representative was content to relegate the hearing to an antitrust "love fest."

"I might support you more if you'd go after illegal Chinese fundraising as hard as you go after Microsoft," Scarborough told Klein.

Scarborough said that recent polls taking the public's pulse on the Microsoft investigation have found that the majority of consumers disagree with the DoJ and the judge.

Scarborough said that the argument that Microsoft's behavior has harmed competition "just doesn't square up." Scarborough asked Klein, point-blank, whether Justice was responsible for the news leaks throughout the settlement and remedy phases of the trial -- an allegation Klein vehemently denied. Scarborough also asked Klein if the DOJ had new "targets" for future investigations in mind, and named as possibilities America Online and Palm.

Klein retorted that when Microsoft purchased WebTV and his agency received six or seven complaints on that merger, the DoJ still allowed that deal to go through. He added that only a few companies are likely to be subject to antitrust scrutiny now or in the future.

In response to queries by several members of Congress, Klein said the DOJ antitrust division's current budget of approximately $100m was not adequate to meet the agency's future needs. Some Microsoft backers have lobbied for DoJ antitrust budget cuts as a sign of dissatisfaction with the agency's Microsoft investigation.

The Microsoft investigation is entering the remedies phase in the coming weeks. After the DoJ and states submit remedy proposals by April 28, Microsoft will submit its reply by May 10, with the DoJ and states submitting their rebuttal by May 17. Judge Jackson will hold a remedies hearing on May 24. Microsoft has said it plans to appeal the case before the US Court of Appeals or the US Supreme Court or both.

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