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House of Bush, house of Gates

The final settlement of the antitrust case against Microsoft, and the subsequent release of the company's cash hoard are the final embraces of what has been a beautiful friendship.
In researching for this article I found a unique perspective on the antitrust case against Microsoft, from the World Socialist Web Site: "The antitrust case against Microsoft was never about securing a greater choice for consumers. It reflected a feeling among a section of America's ruling elite that the US was in danger of losing out to its economic rivals in Japan and Europe."

It's a broad, Chomskian analysis of the case, whereas most accounts I've read describe an epic battle of justice vs. money, with some techno-talk thrown in.

I believe it's mostly correct--that for all the talk about what's best for the consumer, the case came down to Silicon Valley elites vs. Microsoft's greed and brutality, facilitated by political elites with an eye on foreign policy.

In this argument, Microsoft is kind of like an insubordinate general in the US Army who is threatened with being relieved of command. But with George Bush at the helm, the winds of war changed (literally). Microsoft was lightly reprimanded, then promoted to five-star general, given a few new divisions to work with, and a 20% payraise.

The antitrust suit which was brought out in 1998 propelled Microsoft into politics, whereas before the company had not been too involved, at least not publicly. When Judge Thomas P. Jackson ruled in April 2000 that Microsoft was a corporate criminal that needed to be split up, election year politics were well under way. The company had merely to dig in its heels and play the waiting game, until the political tide turned.

In 2000 Microsoft stuffed millions into the pockets of favoured candidates and committees, both Republican and Democrat, but leaning Republican by a margin of 54% to 46%. By September, Microsoft ranked 4th in political contributions, surpassing even Philip Morris and the National Rifle Association in a list of top donors. The antitrust case was stalled on appeal, but Microsoft had won a victory in Summer 2000 when Judge Jackson publicly compared Bill Gates to Napoleon, and was perceived as having a bias in the case. He was later taken off the case.

2001--it was a very good year

In May 2001, George Bush, who had been appointed president by the Supreme Court, appointed a new assistant attorney general to be in charge of US v. Microsoft. He was Charles James, a former Reagan and Bush I official in the DoJ. At his senate nomination hearings he did not mention the Microsoft case at all, though he was asked about it. According to the Investors Business Daily: "...senators questioned James on Microsoft, airline mergers, consolidation in the farming industry and possible antitrust action against OPEC. James chose not to comment on specific cases...'I don't want to get into the specifics of cases,' James said...Even without specific comments, James breezed through the hearing."

In June 2001 an appeals court ruled against the breakup order, and in September the DoJ took that remedy option off the table. In November a settlement was reached, on terms considered very favourable to Microsoft.

One of James' last important acts was to travel to Europe and warn the European Commission to go easy on Microsoft in its antitrust suit against the company. He pointed out that corporate crime in the US is different from corporate crime in Europe, and that any EU ruling may not be recognized in the US. The Register reported at the time: "In saying the theory of monopoly leveraging has been largely rejected by US courts, James is speaking not exactly the truth, but what will become the truth because of the way his office implements (or not) antitrust law."

In October 2002, James abruptly resigned his post to take a job at Chevron Texaco.

Roughly a month after the November settlement, the Bush administration created a new "cybersecurity czar" position, in response to 9/11 and the increasing hack attacks. This new department would protect the Internet and US computer systems. Richard Clarke was named the chief, but he needed a deputy. Of all the places in the world, he looked to Microsoft. Howard Schmidt, Microsoft's Chief Security Officer, was hired in December to be the #2 man in the cyberspace security department.

If nothing else, this gave Microsoft a sense of legitimacy--a sense that if the government turned to Microsoft for security, then Microsoft's products must be secure.

In an interview with the LA Times March 4 2002, Clarke was asked a few poignant questions which touched upon cybersecurity:

"Q: Would it be fair to say that the hundreds of security holes in Microsoft's nearly ubiquitous software products pose the biggest computer security threat today?

A: Microsoft [recently] made a decision to change the way they do business, to make IT security the No. 1 design criterion and subordinate other functionality to security in future products.

A lot of people greet that announcement with cynicism and doubt because of the problems that Microsoft has had in the past with security. It would be more constructive if we all said that we welcome the new policy and will work with them to make sure it happens."

"Q: What should Microsoft do differently?

A: All software manufacturers need to design security into their products rather than [putting] it on as an afterthought...Any software company now that brings products to market riddled with security vulnerabilities risks losing market share.

"Q: Yet given Microsoft's monopolies, competitive pressures haven't done much to improve its security record. Should the government require security reviews or product certification?

A: When the federal government gets into regulation, it frequently gets ham-handed, and out of a wealth of good intentions becomes clumsy and counterproductive."

Rather than criticize Microsoft for creating an insecure product that is part of the national infrastructure, rather than proposing legislation to make that product more secure, the Bush administration's stance was "we welcome the new policy and will work with them to make sure it happens."

With that kind of official encouragment, Microsoft got busy...not busy making its products more secure, but busy trying to cash in on the emerging Homeland Security market.


Link for Register article 10.Aug.2004 10:21



NOTE--the Richard Clarke named in the article is the same one who was the White House counterterrorism chief in the Clinton and Bush administrations and later wrote a bestselling book and became the star of the 9/11 Commission hearings.