Senators Grill DOJ on Microsoft Deal

At a Senate Judiciary Committee hearing today, leaders from both parties made it clear that they want the District Court to consider the tougher remedy proposals filed by nine states.

Senators leery of the Bush administrations antitrust settlement proposal with Microsoft Corp. have few tools to influence the outcome given the unlikelihood of legislation. What they can do – and did this morning -- is amplify public debate in the hope that the court will heed objections to the deal before issuing a final ruling on it.

At a Senate Judiciary Committee hearing today, leaders from both parties made it clear that they want the District Court to consider the tougher remedy proposals filed by nine states last week before approving the settlement agreed to last month by the Department of Justice and nine other states. Grilling Charles James, assistant attorney general of the antitrust division of the Justice Department, senators highlighted the ongoing concerns outlined in the non-settling states proposal.

"The questions raised here and views expressed may help inform the court," Sen. Patrick Leahy, committee chairman, said at the hearing. "The serious questions that have been raised about the scope, enforceability and effectiveness of this proposed settlement leave me concerned that, if approved in its current form, it may simply be an invitation for the next chapter of litigation."

Last months decision among the original 18 plaintiff states – and the District of Columbia – to pursue separate paths in the litigation has left Microsoft battling on two fronts and left the District Court reviewing two sets of remedies for the same anti-competitive behavior. All parties have expressed concern about how the two simultaneous processes might affect each other.

The settlement approval process, which requires a public comment period under the Tunney Act, is scheduled to culminate in a hearing in March. Judge Colleen Kollar-Kotelly has considerable discretion in how the process advances; she may call evidentiary witness to be a heard or she may forego the witnesses. She will also decide whether the settlement approval process is concluded before or after hearings in the non-settling states case.

Critics contend that the settlement is too ambiguous to restore competition. Senators voiced particular concerns about the enforcement mechanism – something that the non-settling states addressed in stricter terms in their proposal last week. "It contains so many loopholes, qualifications and exceptions that many worry that Microsoft will be easily able to evade its provisions," Sen. Herb Kohl, D-Wisc., said about the settlement.

Sen. Mike DeWine, R-Ohio, questioned whether adequate enforcement requires additional DOJ oversight or a "special master" as proposed by the non-settling states. In response to the senators concerns, James said the settlement contains "an unprecedented level of enforcement power." He noted the provision for an on-site compliance team and the possibility of extending the terms two years for non-compliance.

The hearing today was cut short when Sen. Robert Byrd, D-W.V., invoked a seldom-used Senate rule that curtailed all committee activity in an effort to bring members to the Senate floor.

Neither Microsoft nor opponents to the settlement testified because of the abrupt ending, but the Redmond, Wash. company had already irritated some members by sending outside counsel rather than a company employee to testify.

Not all committee members approved of the legislative effort to "inform" the court. Sen. Jeff Sessions, R-Ala., said he was troubled by the leaderships plan to send the hearing transcript to the court. "Weve got litigation going on and it strikes me that weve got a political interest trying to influence a court proceeding," Sessions told eWEEK. "I think we have a political branch intervening in the judicial branch."