The Daily Interview: What's Next for U.S. vs. Microsoft

Tom Campbell has a number of perspectives on the Microsoft (MSFT) antitrust action: He teaches it as a professor of antitrust law at Stanford Law School and for most of the '90s was a Republican U.S. congressman representing Silicon Valley, where many of his corporate constituents were the most vocal supporters of the antitrust move. He also worked as an antitrust lawyer in Washington, where he directed the Bureau of Competition at the Federal Trade Commission in the early '80s.

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TSC: What's the likely outcome of the appeal?

Tom Campbell: Reversal, remand [send back to a lower court] for consideration of remedy seems to be most likely. I doubt they would reverse outright. I think that the question will be, given the nature of the industry today, as of the day of entering the decree, does the breakup make sense?

TSC: Technology is such a dynamic industry, it seems like an argument put forth two years ago is irrelevant today.

Tom Campbell: That's certainly what Microsoft is counting on, and they have a good argument, that the industry moves so quickly. It's almost unfair, the argument is so good. Because it suggests you can get away with monopolistic practices so long as the industry changes so much that by the time you get in front of a court, it's too late to impose any sanctions.

TSC: But how would you split up Microsoft? Tuesday, one of the judges pointed out that a separate operating-system company could just go ahead and create a new browser, tie it to the operating system and get a lot of market share. How does breaking it up help?

Tom Campbell: The answer is identical to the Bells: Couldn't Pac Bell [Pacific Bell], New York Telephone or Ameritech go into the long-line business and equipment manufacture? The answer is yes, eventually. But Judge Green put a rule on them not to for a period of years. That's what would happen here.

TSC: What are the side effects of a trial like this? What more has Microsoft got to lose?

Tom Campbell: Morale is affected by risk. The great danger in antitrust is the private plaintiffs: The private plaintiffs come after you once you lose a case; they don't come after you after a settlement.

TSC: If the appeals court decides to reconsider Judge Jackson's remedies, would the Justice Department appeal? Should they appeal?

Tom Campbell: The DOJ probably will appeal, but the Supreme Court will likely not take an interlocutory appeal while the case is still pending. So the case will go back ... to fashion a different remedy, possibly even the same remedy, by taking evidence on the circumstances of the market today.

Should they appeal? That's much more difficult. ... If you take findings of fact as correct -- and that's really important for me to say, if you take the findings of fact as correct (I don't know, I wasn't there) -- if they were correct, then the remedy was correct. It was appropriate.

TSC: You're not just saying that because you're from Silicon Valley?

Tom Campbell: I do have a fairly deep knowledge of the issue, in that I teach it. It's something that's intrigued everybody who teaches antitrust for a few years now. This is intellectually the most fascinating case I've ever seen in antitrust, and that includes the AT&T case or the oil mergers I did when I was at the FTC.

It is the use of existing monopoly power to impede the development of new technology that would compete with the monopolist. You have antitrust cases where the monopolist uses its market power to disadvantage an existing competitor, struggling competitor or a new entrant. But I've never seen before the use of market power in one technology to forestall, deter, or if you can't do either of those, to co-opt a new technology. If it is proven that that's what they were doing, their purpose in tying the browser and all the preferences with the Internet service providers and the independent software vendors was to prevent the development of the Web as the substitute for the operating system.

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