DOJ: Microsoft must admit it harmed consumers in settlement

In an interview on TV news program Face the Nation, DOJ antitrust chief Joel Klein said that Microsoft Corporation must admit that it harmed consumers if it wishes to reach a settlement with the U.S. government. The comments come just a few days after Klein extended an olive branch of sorts to Microsoft, offering it a chance to settle the case now that Judge Thomas Penfield Jackson has issued his final ruling. Of course, the stakes have risen since the last mediation attempt, which occurred before Jackson issued his guilty verdict against the company in April. During those settlement talks, Microsoft was unable to come to terms with the government, which was then simply asking for a conduct remedy. Instead, the company is now facing a breakup.

Microsoft must "come to grips with the nature of the competitive harm" it caused to consumers by linking its operating and applications systems, Klein said, noting that Microsoft's proposed remedies were "trivial" and "inconsequential." Klein implied that Microsoft didn't take the proposed remedy phase seriously and said that it would have to make serious concessions if it wished to settle the case now. Defending the breakup plan, which was first drafted by Klein and his colleagues, he said that "consumers will get new products, they'll get new innovation and you'll see desktop computing change in dramatic ways." Microsoft, he says, blunted innovation in its desire to protect it monopolies at the expense of customers, partners, and competitors.

Meanwhile, Microsoft is going on a public relations spree, hoping that its reputation among the uninformed masses remains strong. The company is spending millions of dollars on TV, newspaper, and magazine advertisements, and has ramped up a political lobbying force that will produce studies and opinion pieces that support the company's view of the trial. Part of this campaign focuses on lobbying Internet sites through companies that act as if they're grass roots campaigns that are independent from Microsoft. But though the software giant's efforts have paid off with the public, 65% of whom support the company, it's finding its opponents to be less enthusiastic about the lobbying. Iowa attorney general Tom Miller, for example, pledges that the 19 states allied with the U.S. government will continue to pursue Microsoft if a new presidential administration botches the current case. "If for some reason a new administration would want to produce a remedy that Microsoft can work around and continue to do what they have been doing, the 19 states would be resolute and say no," he says. "We would be even more determined than we are today, if that is possible."

Even Microsoft's head legal counsel, Bill Neukom, has taken to the streets to defend the software giant. In an interview last week with ZDNet, Neukom attacked Judge Jackson's characterization of the company and what he calls a rush to judgment. "We are moving from the more theatrical innings to the more analytical part and I believe that on appeal, that the evidentiary record we have submitted will get the full attention of the Court of Appeals and be found persuasive," he said. "We will be raising on appeal the procedural irregularities, including the lack of application of the rules of evidence and the rush to trial, and a limitation on the number of witnesses we could provide.

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