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Microsoft Antitrust Deal Questioned Senators Seek Additional Investigation

Bloomberg News

A group of Republican senators, citing concerns that the Justice Department may have gone soft in its long investigation of Microsoft Corp., Friday asked the Federal Trade Commission to conduct its own antitrust probe of the world’s largest personal computer software company.

Montana Republican Sen. Conrad Burns and two other lawmakers made that request in a letter delivered to FTC Chairman Robert Pitofsky. They said they’ve heard from computer manufacturers and other industry firms concerned about whether Justice’s antitrust division is vigorously looking into complaints that Microsoft is violating the terms of a 1994 antitrust settlement.

The senators asked the FTC to take the extraordinary step of launching its own investigation to determine whether Microsoft is complying with the antitrust settlement.

“We have been contacted by a number of companies, including computer manufacturers, who have raised questions concerning alleged violations by Microsoft,” the letter said. “We regard these reports, if accurate, as very troubling.”

The senators asked Pitofsky to invoke the FTC’s power to investigate corporate compliance with government settlements, saying that “the continued monitoring of an important decree by the Department of Justice has been called into question.”

The Justice Department and the FTC share responsibility for enforcing U.S. antitrust laws, but generally follow a policy of scrupulously trying to avoid stepping on each other’s toes.

“It’s a pretty amazing letter. The odds are almost zero that the FTC would step into the case,” said Washington antitrust lawyer Joe Sims.

“Their job is not to investigate or critique each other,” said Washington antitrust attorney Marc Schildkraut. “Clearly, there is no precedent for what has been suggested.”

The FTC said responsibility for the case belongs with antitrust officials at the Justice Department. “Our understanding is that alleged violations of the consent order is being investigated by the Department of Justice,” FTC spokeswoman Victoria Streitfeld said.

The Justice Department said it is continuing to look into complaints against Microsoft. “We are continuing with our investigation, including the monitoring of the consent decree,” said antitrust division spokeswoman Gina Talamona.

For its part, Microsoft said there’s nothing to the complaints. “Our competitors are continually trying to enlist the government against Microsoft instead of competing on the merits of their products,” said Microsoft spokesman Mark Murray. “The Justice Department is already investigating various aspects of our business right now. Microsoft is cooperating fully and we expect the (Justice Department) will conclude we are acting properly.”

“There’s absolutely no need for the FTC to investigate,” Murray said.

The letter was signed by Burns, Alaska Republican Sen. Ted Stevens, and Wyoming Republican Sen. Craig Thomas.

“We’ve been hearing from people who are concerned about alleged violations by Microsoft,” said Burns’ spokesman Matt Raymond. “They’re saying the Department of Justice isn’t doing much. As a matter of policy, he’s concerned.”

The request drew an opposing letter by Washington state’s Republican Sen. Slade Gorton and Arizona Republican Sen. John McCain. They wrote Senate colleagues urging them to ignore any request to sign on to the call for an FTC probe.

“Given the alacrity with which the (Justice Department) has pursued its investigations of Microsoft’s practices, we do not believe that it is necessary, or appropriate, for the Congress to direct the FTC to investigate,” Gorton and McCain wrote. “Fair, just, and even-handed treatment does not, in our view, encompass instructing the FTC … to second-guess the Department of Justice.”

The request represents the latest twist in an already unusual probe.

The FTC actually started the government’s antitrust scrutiny of Microsoft in 1990. After three years, however, the agency’s commissioners deadlocked on a vote about whether to bring charges. In a rare move, the Justice Department took over the investigation and, in 1994, negotiated a settlement of charges that Microsoft enforced anticompetitive software licensing terms on computer manufacturers.

“It’s very rare that these things take a 180-degree turn, such as the original transfer from the FTC to the Justice Department,” said Washington antitrust lawyer Keith Shugarman. “It would be even stranger and highly unlikely that it would do a complete 360 and bounce back to the FTC.”

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