AAI Denounces Microsoft Lobbying on Antitrust Division Budget

American Antitrust Institute Denounces Microsoft Effort to Undercut Antitrust Budget

In a response to reports in this morning's newspapers that "Microsoft Corp. lobbyists and allies are aggressively pressing Congress to reduce next year's proposed funding for the Justice Department's antitrust division," [front page, Washington Post, October 15, 1999], Albert A. Foer, President of the American Antitrust Institute, issued this statement:

Microsoft knows that it stands in danger of being found liable for violating the nation's antitrust laws, and may be open to a restructuring remedy that breaks up the company in order to protect the competitive process. Moreover, if found to be a monopolist, Microsoft can be held liable in subsequent cases for damages caused by its abuses of monopoly power. No wonder Bill Gates is panicking.

But Gates' effort to persuade Congress to send the Justice Department a message, using the medium of the Department's budget, is outrageous. Like the biblical Sampson, in his fit of frustration, Gates would pull down the temple of antitrust over all our heads.

With negotiations reportedly under way to resolve the government's case, Microsoft's salvo is clearly an attempt to leverage its position through intimidation. Obviously, the future budget of the antitrust division will have little impact on the Microsoft trial itself, which is now nearly complete. In addition to being a negotiating ploy, this lobbying effort is part of a longer-range strategy to keep the government from applying the Sherman Act to the high technology industry of the future - which Microsoft hopes to continue to dominate. Congress should not and must not allow a powerful corporation to dictate antitrust policy in this manner.

For every dollar in the antitrust budget, American consumers and taxpayers receive a huge multiple in benefits. The antitrust division's uncovering of the international vitamin cartel and other similar cartels has this year resulted in over $1 billion in fines and penalties that go into the treasury.

The AAI in mid-September sent to the House and Senate Conferees a detailed cover letter and statement signed by 32 organizations, supporting increased budget levels for the federal antitrust agencies. The letter and a 40-page document ("The Federal Antitrust Commitment: Providing Resources to Meet the Challenge") are available at the AAI website, www.antitrustinstitute.org.