By Erika Morphy E-Commerce Times
06/11/07 4:03 PM PT
The U.S. Justice Department is coming under fire for catering to Microsoft after the disclosure of an internal memo. A key prosecutor reportedly urged antitrust officials to ignore an antitrust complaint filed by Google, one of the software giant's chief competitors. The controversy surrounding the department's dismissal of the complaint could add to mounting pressure to address the Vista issue.
An e-mail apparently written by a key antitrust enforcement official in the U.S. Justice Department is raising suspicions that the Bush Administration unduly favored Microsoft's (Nasdaq: MSFT) positions in an incident that has quickly become known as "memogate."
Issued by Assistant Attorney General Thomas O. Barnett, a former antitrust partner at Covington & Burlington, the memo reportedly urges state attorneys general not to pursue a confidential complaint levied by Google (Nasdaq: GOOG) against the software titan. The memo was disclosed on Sunday in a report by the New York Times.
Google has accused Microsoft of designing its Vista operating system to discourage the use of desktop search engines. Reportedly, the memo addresses concerns of several attorneys general who believed that Google's complaints at least warranted further review.
Microsoft quickly distanced itself from the memo, with General Counsel Brad Smith stating to reporters that the company was unaware of the government's letter.
Reverse Course
What this means to Microsoft in practical terms is unclear. With the memo now public, some attorneys general may feel duty-bound to pursue the accusations. Also, the Justice Department -- already beleaguered by accusations that several prosecutors were replaced for political reasons -- might decide to give itself a public makeover and take a sterner course with Microsoft to show that it is, in fact, unbiased.
Until now, the Bush Administration's Justice Department seems to have given Redmond a pass. A trial calling for the breakup of the company began in 1998 and ended in 2002 with a consent decree governing Microsoft's behavior. No lasting action has been taken against the company -- at least not in the U.S.
EU Puts the Bite on Microsoft
Prior to the Barnett memo, Microsoft was not completely untroubled, though, said Peter Vogel, a partner with Gardere Wynne Sewell.
The possible undue influence of the Justice Department has given the story legs, he told the E-Commerce Times, "but these were issues that the Court of Appeals was reviewing all along."
Then there is the action taken by the European Commission, Vogel noted. Over the last three years, Microsoft has been hit with some US$1 billion in fines. Europe's current battle with Microsoft concerns whether the company is complying with the requirement to offer other software makers access to its Windows Server communications protocols.
"This is the modern world in which Microsoft now finds itself," Vogel remarked.
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apparently written by a key antitrust enforcement official in the U.S. Justice Department is raising suspicions that the Bush Administration unduly favored Microsoft's (Nasdaq: MSFT) positions in an incident that has quickly become known as "memogate."
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