[Congressional Record Volume 144, Number 124 (Thursday, September 17, 1998)]
[Senate]
[Pages S10530-S10531]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           THE DEPARTMENT OF JUSTICE'S WAR AGAINST CAPITALISM

  Mr. GORTON. Mr. President, few of my colleagues would dispute the 
notion that capitalism is the foundation of America's economic success. 
Under capitalism, competition inspires innovation. Innovation led in 
the 19th Century to the industrial revolution, and in the 20th Century 
to the digital age. These developments have made the United States the 
richest, most successful nation in the world. But this Administration 
seems to distrust our capitalist, competitive system and wants to 
replace it with some sort of ``third-way'' in which government 
bureaucrats make major decisions about what innovations will be allowed 
in our economic system, and when.
  I refer particularly, Mr. President, to the Justice Department's 
vendetta against Microsoft, a company that has had the ingenuity and 
determination to achieve the American dream. Against the odds, one man 
with a good idea turned a workshop in his garage into the most 
successful high technology company in the world. The Administration is 
now on a path to destroy not only the man and his company but to 
destroy the dream as well.
  Assistant Attorney General Joel Klein, head of the Justice 
Department's Antitrust Division, has declare war on success in the name 
of antitrust law. According to Joel Klein's world view, it is the duty 
of the United States government to protect not the consumer but the 
company that cannot compete on its own merits.
  Mr. Klein has made his ambition abundantly clear. When he testified 
before the Senate Judiciary Committee in June he said, ``We reject 
categorically the notion that markets will self-correct and we should 
sit back and watch.'' Instead, Mr. Klein believes the government should 
control every move of America's most successful and innovative 
companies.
  What candidate for president ran on this platform? The American 
people were not informed that free markets were to be abandoned as our 
principal economic guide. Instead of allowing the best man, or in this 
case the best company, to win, the Justice Department wants to control 
the market and dole out slices of it to companies of its choice.
  This is anathema to the free market, Mr. President.
  The Department's case, after all, is merely an attempt to give 
Netscape and other Microsoft rivals a leg up in the ongoing battle for 
market share in the software industry. Microsoft has earned its current 
prominence in the software industry through hard work, innovation, and 
consumer choice. The company has been successful because it has had 
better ideas and more efficient means of turning those ideas into 
superior products. Consumers in the United States and throughout the 
world simply prefer Microsoft products.
  But jealous rivals who have not reached the same level of success 
have now enlisted the Justice Department to give them what they and the 
Administration believe is rightfully theirs--more market share. These 
rivals, I fear, may soon regret ever having opened this Pandora's box. 
For a precedent may have already been set. That precedent is that 
government intervention in the market, in the absence of consumer 
complaint or dissatisfaction, is acceptable.
  That is why I speak here today, Mr. President, as one in a growing 
number of voices in America in firm opposition to the Administration's 
case against Microsoft.
  As I see it, the Administration is not working for the greater good, 
but for its own good. Those at the highest levels of this 
Administration believe they, not the market and certainly not 
consumers, know what is best for the nation. Rick Rule, former 
Assistant Attorney General for Antitrust under President Ronald Reagan, 
summed it up best when he said, ``The Hubris reflected in the 
government's case against Microsoft is monumental.''

[[Page S10531]]

  This is just the beginning, Mr. President. Yesterday, at the Upside 
Conference, a meeting of high-tech industry leaders here in Washington, 
Roberta Katz, General Counsel for Netscape, said of the government's 
case against Microsoft, ``This is about a lot more than just 
Microsoft.'' To Ms. Katz I say, be careful what you wish for, be very 
careful what you wish for. Today the government's target is Microsoft, 
but tomorrow, it could very well be Netscape.
  The Antitrust Division, in filing its case against Microsoft, is 
working to justify an expanded role for government in the high-tech 
industry. The further its tentacles are allowed to reach into high-tech 
market, the tighter its grip on the industry will become.
  In fact, at a hearing tomorrow before Judge Jackson, the Justice 
Department will request that it be allowed to expand the scope of its 
case against Microsoft. There are two explanations for the Justice 
Department's motives; both are troubling. The first is that the 
Antitrust division is seeking to increase the aspects of the high-tech 
industry over which it will gain control if it wins the case. The 
second is that the Division is becoming increasingly desperate to find 
an issue, any issue, on which is can prevail in court.
  The first point should be of no little concern to Ms. Katz of 
Netscape and her counterparts at all the other high-tech companies 
cheering the Justice Department on. But it is the second point on which 
I would like to expand.
  The Antitrust Division knows that its case against Microsoft is 
literally falling apart at the seams. As my colleagues will recall, on 
June 23 a three judge United States Appeals Court panel overturned the 
preliminary injunction issued against Microsoft last December. The 
heart of the injunction, and the heart of the Department's current case 
against Microsoft, is the company's decision to integrate its web 
browser into its Windows operating system.
  As soon as the Appeals Court ruled that the integration of browser 
technology into Windows as not a violation of U.S. antitrust law, Joel 
Klein started scrambling frantically for other claims to make against 
Microsoft. If the Administration's concern was truly that Microsoft was 
acting illegally in integrating products into Windows, the Justice 
Department would have and should have dismissed its case then and 
there. But it didn't.
  Joel Klein continued attempts to drag more and more issues into the 
case is telling, Mr. President. Those attempts are a clear sign that 
the government's real beef with Microsoft is its size. The government 
can't stand the fact that Microsoft is successful. Microsoft, in the 
eyes of the Administration, is just too big. So the Justice Department 
will do everything it can to paint Bill Gates as the bad guy.
  As Holman W. Jenkins, Jr. aptly described it in an editorial in 
Wednesday's Wall Street Journal, Joel Klein ``has spraypainted the 
world with subpoenas, calling companies to testify about every failed 
and not-yet-failed collaboration between competitive allies and allied 
competitors in the computer industry.''
  the strategy, according to Rick Rule, is ``the old plaintiff's trick 
of throwing up lots of snippets of dialogue that try to tar the 
defendant as a bad guy.''
  Aside from all the legal commentary, the real issue, Mr. President, 
is that the Justice Department's case against Microsoft is a bad one. 
Joel Klein knows it, the high-tech community knows it, and I know it.
  No legal wrangling can disguise the fact that what the Administration 
is doing is wrong. It is not only wrong in the sense that the Justice 
Department will probably lose in the end. But it is wrong in the sense 
that the very premise on which it stands is at fundamental odds with 
the free market capitalism that has made this nation great.

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