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Sat 30 Dec 2000 04:00 AM

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Microsoft breakup: Is Bush the saviour that Gates wanted?

While a Republican President might be good for business, George W Bush might not be able to offer Microsoft the lifeline it had hoped for.

While a Republican President might be good for business, George W Bush might not be able to offer Microsoft the lifeline it had hoped for.

Microsoft may have hoped that a Republican President would help it wriggle off the hook over its anti-trust problems, but according to US legal experts George W Bush will not be able to offer Redmond the helping hand it was looking for.

Bush has publicly stated his support for Microsoft in the past, but his choice of Attorney General and his problems actually gaining the presidency mean that no assistance will be forthcoming for Microsoft before the appeals process kicks off in January.

The acquisition of Great Plains Software, announced last week, has already attracted more antitrust attention for Microsoft. An unnamed competitor of Microsoft has written a letter of complaint to the Department of Justice, reports CMPnet, calling for an investigation into the $1.1 billion deal.

Judge Jackson ruled last year that Microsoft be broken up into separate operating system and applications companies after deciding that the company had broken antitrust [monopoly] laws. Appeals are due to start in January, but Bush’s problems in actually gaining office will mean that he is in no position to intervene in the case until after the Court of Appeal has made its decision on the break up ruling in May or June, said CNET.

Initially Bush will be busy trying to get his way over some 3,000 political appointments that will put his people in positions of power. Thereafter a divided Senate, a very slim Republican majority in the House of Representatives and a weak power base among Washington bureaucrats will mean that he has to choose his policy battles very carefully, with Microsoft taking a low priority.

The matter of political appointments is a particularly awkward problem. Bush’s nominee for Attorney General, who has overall say on judicial matters, is Senator John Ashcroft of Missouri. While Ashcroft has not stated his position publicly on a Microsoft break-up, he clashed with Bill Gates during questioning in March 1998 for a Senate Judiciary Committee, when Gates took at umbrage over the Senator's line of questioning about a Microsoft desktop operating system monopoly.

The Senate Judiciary Committee is likely to be an ongoing headache for Bush and Microsoft. Bush will need the committee onside if he is to get his choice of judges appointed. This will mean winning favour with the head of the committee, one Senator Orrin Hatch, said Bob Lande, Law professor at the University of Baltimoreone. Hatch is one of the most fervent Republican supporters of the pursuance of Microsoft through the courts.

The delays in Bush getting his people into office will also mean that by the time the action begins again, it will still be pursued by the acting Attorney General and his staff.

Not only would it be considered bad form for Bush to interfere at such an advanced stage of a case, said Bill Kovacic, a professor of law at the George Washington Law School, there is also no precedent of the Department of Justice gaining such a strong ruling under anti-trust law and then simply abandoning the action, since the passing of the relevant act, the Sherman Act in 1890.

The most likely course of action according to Kovacic, would be to allow the action to continue as planned: [Bush will instruct the acting assistant Attorney General] “steady as she goes; argue the case, pursue the case, and we’ll see what the Court of Appeals does.”

While the Court of Appeals is predicted to overturn most of the US government’s victory so far, including a break up of Microsoft, the Department of Justice will still have to pursue a strong remedy to Microsoft’s abuse of it’s market position, otherwise the 19 states that initiated the action could simply refuse to accept the settlement and pursue the case on to the Supreme Court warned Iowa Attorney General Tom Miller warned.

All in all, it’s not quite the start to the New Year that Microsoft might have hoped for.

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