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One of the biggest games in Washington these days is trying to handicap the effect the Bush Administration will have on the Microsoft case. Every word that new President, his senior advisers, and Charles James, Bush's nominee to head the Antitrust Div. at the Justice Dept., have uttered in the last year has been fully parsed.
But if Microsoft escapes the corporate dismemberment ordered last June by U.S. District Judge Thomas Penfield Jackson, Bush won't be the President most responsible. That honor will go to Ronald Reagan.
Twelve years after Reagan left office, his presence is still felt in the U.S. Court of Appeals for the District of Columbia, which takes up the Microsoft case on Feb. 26 and 27. Even after the Bush Sr. and Clinton Administrations, Reagan's folks still make up the largest bloc on the Appeals Court as a whole -- and specifically on the seven-member panel that will take on the Microsoft case.
DREAM TEAM. All three of the Reaganites who will hear U.S. v. Microsoft are dyed-in-the-wool conservatives. They are: Douglas Ginsburg, an antitrust expert best known for his thwarted nomination to the Supreme Court in 1987; Steven Williams, author of a previous pro-Microsoft ruling; and David Sentelle, an antitrust neophyte but a conservative's conservative nonetheless.
Add to these jurists Bush Sr. appointee Raymond Randolph, who joined in the Williams ruling, and it's not hard to see where a majority to overturn Jackson's decision might come from. "Microsoft couldn't ask for a better venue for its appeal," notes William E. Kovacic, law professor at George Washington University.
If the appeal goes its way, Gates & Co. can thank the Gipper. He showed the rest of us how the Presidential legacy game is played. His 1980 landslide victory not only put him in the White House but gave him a solid majority in the Senate. Free from the contentious confirmation battles with hostile Senates that have dogged other Presidents, Reagan went for conservative ideologues young enough to make their presence known for many years to come.
Certainly, not all Reaganites take Microsoft's side. Just look at two former members of the D.C. Circuit -- Robert Bork and Kenneth Starr -- who are now actively working against Microsoft. But overall, the Appeals Court appears to be a dream come true for the company. Even Microsoft's harshest critics expect to take at least a partial hit when the appellate ruling is handed down. "Most of us expect we will win part of the case and lose part of it," says Edward Black, president of the Computer & Communications Industry Assn., an anti-Microsoft trade group.
MEN IN BLACK. The portion of Judge Jackson's handiwork most likely to go is his order breaking the company into two -- one company to sell the Windows operating system and a second for applications. Jackson held no hearings on how this remedy would work. For this reason, the nearly unanimous opinion among followers of the case is that the order will be sent back, either to Jackson or another judge at the trial-court level, to consider what a breakup would entail.
The next most likely piece to fall is Jackson's ruling that bundling Internet Explorer into the Windows operating system constituted illegal "tying." That's when a company uses a monopoly to force a consumer to take a product he or she may or may not want. Judges Williams and Randolph said in a previous ruling that Microsoft can tie Explorer to Windows -- even if this hurts its only competitor, Netscape -- as long as there is some plausible benefit to having an integrated product. If that standard is used, Microsoft wins.
From a legal perspective, a Microsoft victory on these two issues would not be the end of the case. The company's efforts to pressure computer makers not to carry competing software products would still provide a compelling argument for trustbusters. But politically, a mixed ruling would likely send Microsoft and the Justice Dept. back to the bargaining table. At that point, the new Bush squad might be a bit more accommodating than the Clintonites would have been. But if those talks do get under way, it will largely be the work of the the Reagan team -- the one in black robes.
By Dan Carney in Washington Edited by Douglas Harbrecht
Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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