Statements On The Justice Department’s Decision Not To Seek A Microsoft Breakup

James L. Gattuso, Vice President for Policy, Competitive Enterprise Institute<?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />

“Today’s announcement that the Justice Department will not seek a break-up of Microsoft is like an announcement that leaves will be falling off trees this fall.  It’s the right decision but no surprise.  More significant is the Justice Department’s decision to drop its claim of illegal tying.  That avoids a potentially long and complicated hearing on the issue, and remedies that would be harmful to consumers and innovation.  While significant issues remain, this case is now much more likely to be resolved quickly.” 

James Gattuso previously served as Deputy Chief of the Office of Plans and Policy at the Federal Communications Commission, Associate Director of the President's Council on Competitiveness, and an antitrust attorney in private practice.

James V. DeLong, Senior Fellow, Project on Technology & Innovation, Competitive Enterprise Institute

“The government has jettisoned those parts of its litigation against Microsoft that would have inflicted the greatest damage on consumers:  a tying claim that equated integration with illegality, and a whimsical trial court decision to split the company.  So far, so good.  But the rest of the case – monopoly maintenance – remains dubious, if not as ridiculous as the claims tossed overboard.   Judge Jackson’s decision on this issue rested on ‘findings of fact’ about the industry that were a mixture of gossip and over-generalization, not on facts as that term is defined in any dictionary. 

Politically, it would be difficult for DOJ to abandon a part of the case that it won.  But the Department expressed a desire for further hearings on the realities of the computer industry.  This opens the door to a tolerable settlement, in which Jackson’s findings are rendered moot, Microsoft agrees to some restrictions on hard-nosed business practices, and the high tech world in general avoids being saddled with antitrust rules based on the misapprehensions of techno-challenged lawyers.  It won't be pretty, but it might do.”

James DeLong is a graduate of Harvard Law School.

Mr. Gattuso and Mr. DeLong are available for further comment and interviews on the Microsoft case.  Please call the media relations department at 202-331-1010 or 703-899-4382.