The Case For The Breakup

  • A few hours before the justice department recommended splitting Microsoft, TIME spoke to Joel Klein, the U.S. Assistant Attorney General for antitrust, who spearheaded the landmark case against the software giant.

    Q. Your contention seems to be that breaking Microsoft in two is not really all that radical a remedy.

    A. This is far less radical than trying to impose rules on Microsoft's behavior. This solution puts its faith in the marketplace to govern conduct rather than having the government try to regulate what can go into an operating system. That would require more intrusive ongoing supervision and have greater costs.

    Q. But what gives you the right to bust up a company?

    A. The court ruling made it clear we have the right to a remedy that assures that anticompetitive practices do not continue and that undoes the harms that have happened to systems such as Java.

    Q. But isn't Java pretty much dead as a cross-platform product, just as other browsers are?

    A. Right. It's hard to resurrect things after anticompetitive practices. But our remedies will keep the door open for other cross-platform products in the future. That's critical, because a whole bunch of new technologies could develop soon if Microsoft's anticompetitive tactics don't strangle them.

    Q. Such as?

    A. Voice recognition, server-based applications, new ways to stream audio and video, handheld devices.

    Q. But even after a breakup, what's to stop Microsoft from bundling all of these functions into Windows operating systems?

    A. The beauty of this approach is that Microsoft would have leeway to develop its operating system as it sees fit, according to what the market wants. It could integrate a browser or anything else. But the dynamics of the market would restrain it. It couldn't leverage Microsoft Word and Office Suite to protect a monopoly in the operating system, so competing operating platforms could spring up. And during a transition phase, there would be rules allowing computer makers and developers to promote competition so that the best products win.

    Q. If this approach is so great, why did you spend so much time trying to get a compromise based on keeping Microsoft intact?

    A. Our preferred approach had always been to have a structural solution that would require less government intrusion.

    Q. Did you talk to Clinton about this?

    A. No. The President has said this is an enforcement matter for the Justice Department. We were requested to give Treasury Secretary Lawrence Summers and White House economic adviser Gene Sperling a briefing. They asked a lot of good questions, and we went through our assessment of why this remedy is efficient and pro-competitive.

    Q. Are you worried that the next Administration might not pursue this case?

    A. No. The court gave a clear finding that Microsoft had engaged in massive anti-competitive practices involving a broad spectrum of products. The Justice Department is a law-enforcement agency, and I expect there will be continuity.

    Q. Couldn't this end up being bad for consumers who would be happier with one company providing a standard operating system and software neatly bundled?

    A. I understand some might want that, just as in the old days some wanted one big phone company. But that's wrong, and the court made it clear. Consumers are losing choice and entrepreneurs are being deterred from innovating because of Microsoft's illegal practices.