Hardball and Windows
Tuesday, October 19, 1999; Page A19 For an example of sheer corporate arrogance, it's hard to top Microsoft's move last month to pressure Congress to restrict funding for its courtroom rival, the Justice Department's antitrust division.
Microsoft's political hardball was disclosed last week by Post reporters Dan Morgan and Juliet Eilperin, and it's the kind of thing that should offend reasonable people -- no matter what they may think of the merits of Justice's antitrust suit against Microsoft, which is now before Judge Thomas Penfield Jackson.
This is a sorry attempt to use political pressure to influence a judicial process -- and a sign that Microsoft's critics may have been right when they warned that the company has grown so powerful through the monopoly of its "Windows" operating system that it poses a threat to its industry and the public.
I write this, as the jilted lovers like to say, more in sorrow than in anger. Through the trial, I've written repeatedly that Microsoft's tough tactics in the marketplace are part of what makes it a great company -- and that the market itself is doing more to discipline Microsoft than government lawyers could ever achieve. Part of why I admired Microsoft was that I could never imagine this jewel of America's new high-tech economy stooping to this kind of cheap politics.
But maybe the company's defenders have missed something: Perhaps the arrogance of power truly has seeped into Microsoft's corporate soul. Have all those hours of being grilled by Justice Department lawyer David Boies made the world's richest man, Bill Gates, so angry that he lost his cool -- and now is letting his lobbyists pursue his tormentors?
Sensible CEOs don't do things like that in America -- or at least they shouldn't. Imagine for a moment what we would think if, after the Exxon Valdez oil spill, Exxon had mobilized its lobbyists to try to slash funding for the Environmental Protection Agency. Or if junk-bond king Michael Milken had tried to subvert the Securities and Exchange Commission as it was preparing an enforcement action against him.
Microsoft is in court, accused of violating the nation's antitrust laws. That allegation may or may not be valid, but it's a matter for the courts to decide. If Microsoft doesn't like Judge Jackson's decision, it can appeal to the D.C. circuit court, and from there to the Supreme Court. Microsoft will doubtless pursue all those remedies, as it should. That's a fair fight.
But what the company has done, in addition, is to try to gut its critics through the exercise of raw political power. The Microsoft rabbit punches were its lobbying to cut $9 million from the Clinton administration's proposed antitrust budget. Its case has been championed, among others, by home-state Sen. Slade Gorton of Washington, who, according to the Post has received $51,000 in campaign contributions since 1997 from the software giant.
Microsoft also received help from nonprofit groups to which it has made significant gifts -- such as Citizens for a Sound Economy, the National Taxpayers Union and Americans for Tax Reform. Microsoft insists it didn't orchestrate any pressure campaign. But two days after returning from a round of briefings at Microsoft headquarters, those three groups sent a letter urging the House to stick with its $105 million spending plan for the antitrust division -- which is $7 million less than the Senate has proposed and $9 million below the administration's request.
What would happen if Microsoft and its political allies prevailed and the House spending plan was adopted? According to the Justice Department, the antitrust division would be unable to fill 72 vacant positions and would have to cut its staff by about 6 percent below the authorized FY '99 level. "We would be unable to fully staff ongoing matters or investigate new anti-competitive situations as they are brought to our attention," according to a department source.
The Microsoft case is nearly over, so it probably wouldn't be affected directly. In that sense, the company seems to be acting out of spite. The message is: Mess with us, and we'll mess with your budget.
Among those offended by the pro-Microsoft legislative campaign is the antitrust section of the American Bar Association. It issued a tart statement several months ago warning that "the Congressional budget and appropriations process should not be used as a vehicle by which to intervene in or influence the appropriate prosecutorial decision making by duly constituted antitrust law enforcement officials."
Microsoft, in its clumsy way, may imagine that this is the way politics is played inside the Beltway. For years, the company was chided by a certain sort of Washington "insider" for not throwing its weight around more, and the company's defenders are now insisting that Microsoft is just playing politics. The cynical refrain here is: Doesn't everybody do it?
But everybody doesn't do it. The antitrust division has gone up against some big, politically potent companies in recent years -- from Archer Daniels Midland to General Electric to American Airlines. No one at Justice can remember a company trying to strike back in this way.
Microsoft's bald attempt to cut funding for its adversary, in the middle of litigation, isn't normal politics -- even by our current debased standards.