Starr Accuses Bush Administration Of Downplaying Microsoft Antitrust Case

Former Whitewater Special Prosecutor Ken Starr accused the Bush administration and the Attorney General's office of downplaying the Microsoft antitrust case in favor of a quick settlement.

"This is George W. Bush's case. This is not a policy issue, but a law enforcement issue," said Starr, one of five panelists who gathered at the Cornell Club of New York City on Wednesday night to mull potential remedies in the case just hours before the Windows XP launch. "The antitrust laws are friends of liberty, and that is what this case is about--economic liberty and the ability of players in the marketplace to make free choices," said Starr, an attorney for ProComp, an association of Microsoft antitrust proponents including Sun Microsystems.

Microsoft will manage to ship Windows XP without government intrusion, but OEMs and consumers want more flexibility in creating competitive products, said one Federal Trade Commission official.

"Consumers didn't have choice. OEMs didn't have choice," said Kevin Arquit, former director of the FTC's Bureau of Competition, referring to Microsoft's domination of the browser market . "On the eve of the release of Windows XP, we'll see more [of that]."

Nevertheless, the panel of experts, including U.S. government officials, antitrust attorneys and those representing government think tanks and academic institutions, were evenly divided over appropriate remedies, the severity of the crime and the impact on consumers.

Several of Microsoft's adversaries say the company must be restricted from exclusive OEM contracts to display Windows Media Player on the Windows XP desktop. They maintain that granting OEMs flexibility over the browser icon addresses an old battle already won by Microsoft.

However, Lars Liebeler, an attorney with Thaler Liebeler, said Tuesday that the government failed to demonstrate a causal connection between Microsoft's alleged anticompetitive behavior and the monopoly maintenance violation upheld by the U.S. Court of Appeals.

Regardless of the placement of icons on the Windows desktop, consumers are free to choose which applications to use, he said, citing AOL's dominance over MSN as proof.

"We're here on the eve of the launch of Windows XP. The government hasn't filed the paperwork to stop the shipment of Windows XP," said Liebeler. "Microsoft inclusion of its Media Player, MSN and Internet Explorer icons in XP does not preclude anyone from using a competitive product."

He also warned that any remedy needs to be carefully considered because the law of unintended consequences could hurt consumers. "It's got to be carefully tailored for what will happen in the marketplace so as to not hurt consumers," Liebeler added.

Others say the punishment shouldn't be designed to fit the crime but to benefit consumers. Nicholas Economides, professor at New York University School of Business, disputed that consumers have been hurt by Microsoft's alleged anticompetitive tactics and proposed three remedies that would address the issues: a prohibition on exclusive contracts and requirements that Microsoft publish price lists for volume discounts and make publicly available the APIs that bind Internet Explorer to the operating system.

"Microsoft should be able to live well with this remedy," said Economides.

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