High-tech trust-busting a bust with public today

After barrels of ink and pounds of paper, the case against Microsoft seems to have failed in at least one important court - that of public opinion.

Polls and political tea leaves suggest no widespread public support for a breakup of the company, as the US Justice Department has recommended.

And while that conclusion won't necessarily deter the wheels of justice, it does bespeak a new degree of public comfort with corporate bigness - as well as a disconnect between older social and political values and the so-called New Economy.

One short-term implication of all this could be that the Microsoft issue will take on a higher profile in this year's elections.

So far, the two major candidates for president have been cagey about committing themselves to one side or the other. But with no public enthusiasm for the breakup plan put forth by the Clinton administration, George W. Bush may be emboldened to attack Al Gore on the issue.

But politics aside, the case is already carving itself a place in the history of major antitrust actions as one where Washington is not riding a wave of public support.

Today's quiescent mood is in sharp contrast to the battle that led to the breakup of Standard Oil in 1911. In that battle, President Teddy Roosevelt mounted a populist assault on the empire of John D. Rockefeller that split the entity into 34 companies when all was said and done.

And while AT&T was not viewed as malevolently as Standard Oil when it was taken to court in 1974 by the US government, consumers did seem convinced that breaking up the company would lead to lower prices.

In this case, however, Microsoft is not seen as a public enemy, nor are Americans convinced that breaking up the company will improve consumer choice or prices.

"We're living in a time when bigness is viewed as a good thing. People are not concerned about concentrations of wealth. What they're concerned with is their own stock-market performance," says Bryan Ford, an antitrust specialist at Santa Clara University.

Indeed, despite a long trial whose revelations were widely seen as damaging to Microsoft and its founder, Bill Gates, the public view hasn't changed.

Through the course of last year, as the trial trotted out allegations of illegal behavior by the software behemoth, Microsoft's standing with the public ended as high as it began. In November, as the judge in the case issued "findings of facts" that labeled the company a monopoly, 67 percent of the public had a favorable view of the company and an equal share felt the same about Mr. Gates, according to a Galllup poll.

More to the point, when the Justice Department recommended splitting the company in two, a Gallup poll last weekend found only 21 percent favored a breakup.

"Microsoft products are very popular, and Bill Gates is one of the greatest business celebrities of this century," says Stephen Hess of the Brookings Institution, explaining public reluctance to structurally altering the company.

Adding to resistance to the government's plan, says Mr. Hess, is the growing number of Washington elite, such as news media editorialists, who are picking apart the Justice Department recommendation.

All, says Hess, are signs that the politics of dismantling Microsoft is going to be uphill.

But from the beginning, political allegiances in the Microsoft case have been hard to predict.

While Republicans have traditionally been pro-business and reluctant to see government interference in the marketplace, Republicans like Sen. Orrin Hatch of Utah and conservative institutions like the Progress and Freedom Foundation have been staunch critics of Microsoft.

These blurred partisan dividing lines are emblematic of how many aspects of the New Economy, and technology in particular, are creating new political hybrids.

Open export of encryption software, for instance, has been opposed by the Clinton administration because of defense and national-security concerns. Many Republicans, dropping their usual hawkish ways, have favored relaxation of export controls.

In terms of antitrust law, Robert Levy of the Cato Institute says the technology era is producing schisms on the right because values that used to coincide now seem to diverge. He cites economic efficiency and private property rights as a good example.

Whereas in most past antitrust cases conservative positions could embrace both, in the case of Microsoft, advocates of a breakup are willing to torpedo Microsoft's exclusive rights to its operating system to bring about greater economic benefits for consumers and the economy as a whole.

If there are schisms in the political establishment, it may simply be evidence that issues arising out of the technology era don't fit past molds, says Lezlee Westine, general counsel for Technet, an advocacy group based in Silicon Valley.

Speaking of the technology sector, Ms. Westine says, "95 percent of the individuals in technology are not partisan, they're policy driven." And while technology certainly has its own agenda, and is spending more and more in Washington to get its way, its alliances are fluid.

"This industry is forcing the two sides together," says Westine.

Others, however, don't see harmonic convergence as much as growing confusion.

"In each party there is this conflict" over the right and winning policy positions on a range of new technology issues, says Larry Gerston, a political scientist at San Jose State University.

And contributing to the lack of clear distinction between the parties on technology issues is the simple fact that "the parties themselves are closer to each other than ever before, and that is spilling over into issues like Microsoft," he says.

(c) Copyright 2000. The Christian Science Publishing Society

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