Department of Justice
601 D Street NW
Washington D.C. 20530
on United States v. Microsoft Corporation Settlement Agreement
Dear Ms. Hesse:
this letter as the written comments of the Center for Individual
Freedom (the "Center") on the revised proposed Final
Judgment to be executed in the case of United States v. Microsoft
Corporation. The Center supports, in principle, the proposed
settlement and respectfully submits the following comments.
By way of introduction, the Center is a non-partisan, non-profit
organization with the mission to examine and focus public, legislative
and judicial attention on individual freedoms and individual rights
guaranteed by the U.S. Constitution. As free-market advocates,
we are opposed to over-burdensome state and federal regulations
and government intervention in private businesses and property
The complaint in this case charged, among other things, that Microsoft
violated sections 1 and 2 of the Sherman Antitrust Act in order
to maintain a monopoly and protect a barrier to entry. The proposed
Final Judgment, now pending in federal court in Washington, D.C.,
would settle the case by requiring Microsoft to, among other things,
refrain from penalizing companies that distribute competing software,
charge published rates and offer uniform discounts, share application
program codes for its own middleware with competitors, and make
available communications protocols that will help Microsofts
competitors in the server market.
by the Tunney Act, the Department of Justice published a revised
proposed Final Judgment in the Federal Register on November 28,
2001. (66 FR 59,452). Under the Tunney Act, the court is required
to make a determination, prior to approving the proposed consent
judgment, that "the entry of such judgment is the public interest."
15 U.S.C. 16(e); see also United States v. Airline
Tariff Publ'g Co., 836 F. Supp. 9, 11 (D.D.C. 1993).
The pace of
antitrust litigation is notably slow and speed is essential here
so as not to allow protracted litigation to further stifle free-market
growth. In fact, the Center contends that consumer harm began
with the competitor-driven lawsuit because distractions resulted
in diminished innovation. Consumers were not harmed by the business
practices of Microsoft.
As you consider
the public interest in settling this case quickly, the Center
strongly urges you to consider as well the constitutional implications
of this case and the settlement. Article I, Section 8 of the U.S.
Constitution grants to Congress the authority to establish copyright
protection for authors and inventors. The Fifth Amendment to the
U.S. Constitution provides additional protection for all property
rights, tangible as well as intangible, including intellectual
property, by prohibiting the government from taking private property
for public use without just compensation. A primary purpose of
intellectual property rights guaranteed under the U.S. Constitution
is to provide creators and inventors with incentives to create.
A remedy sought
by the Justice Department was to force Microsoft to provide its
competitors with the companys "source code" for
Windows operating system. The source code, in which Microsoft
invested hundreds of millions of dollars for development, represents
the blueprint for much of the companys success. Forcing
Microsoft to reveal the source code to its competitors runs contrary
to the intellectual property protections outlined in the Constitution.
The proposed Final Judgment, in large part, recognizes this and
incorporates safeguards to preserve Microsofts intellectual
views the Justice Departments antitrust lawsuit against
Microsoft as a government attack on pro-competitive conduct and
a manifestation of the growing legal tension between preserving
competition and promoting innovation. In the Centers view,
this trend mandates a review of our antitrust laws to insure that
they are flexible enough to address the intellectual property
issues raised by such cases. Certainly United States v. Microsoft
will have a long lasting impact in the antitrust world.
For the reasons
above, the Center once again urges you to adopt the proposed Final
Judgment. Although not perfect, it is fair and reasonable and
in the public interest. Furthermore, the Center is relieved that
the district courts breakup of the company, initially voided
by the appellate court, is absent from this settlement because
the breakup of the company would have imposed enormous costs on
consumers, as the companys efficiencies would have been
appreciates your attention to its views. Please place this letter
in the appropriate public files.
Renee L. Giachino,
General Counsel, Center for Individual Freedom