Industry Analysts See Company Waiting for New Administration

With the Microsoft Corp. antitrust case headed for a lengthy appeals process, the company’s fate will rest in part with the two men currently battling for the presidency.

How George W. Bush or Al Gore would deal with the case is an open question colored by high political stakes and huge campaign contributions.

Still, there was little question among industry insiders and political experts that at least part of Microsoft’s strategy lies in delaying the case until a new, and hopefully more pliable, administration takes office.

“It’s clear that part of their . . . plan is to make the political process derail the judicial process,” said Ed Black, president of the Computer & Communications Industry Assn., a trade group whose clients include Microsoft opponents.

The new president could influence the case in several ways. A new attorney general could push for a settlement more favorable to Microsoft--even after the case is well into the appellate phase. And the new president may be able to appoint one to two new Supreme Court justices when and if the case ever makes its way before that body.

Some insiders even believe Microsoft is taking a cue from the IBM Corp. antitrust case, which dragged on for 13 years before finally being dismissed in 1982, shortly after Ronald Reagan took office.

On its face, the IBM ruling was made because technology had changed so much as to make the issues in the case irrelevant--part of Microsoft’s arguments about its own browser technology. But at the time there were widespread accusations that political pressure played a role in the decision.

That’s exactly the sort of pressure that Microsoft may hope comes to play in a new administration, political experts said.

“You wouldn’t see a change with the Gore administration. But with Bush, you don’t know,” one industry insider said.

“They probably think they can influence Bush appointees. I think that’s why they didn’t settle. I think they can win by dragging this out and turning it into a political process.”

Others, however, were skeptical that either candidate would treat the case differently.

For one thing, they said, Microsoft has a formidable array of enemies. If either candidate were to favor the behemoth after taking office, it could be an unpopular stand in the next election.

And for another, antitrust law tends to be too complicated to lend itself to simple sound bites.

With education and health care as voters’ top issues, a new president might have much to lose in forcing a new direction in the case, which could seem to be an interference with a legal matter.

“This is not an issue that resonates with the general electorate,” said Glenn Manishin, a former antitrust division attorney and currently counsel to the Computer & Communications Industry Assn.

That means the two men will come under a microscope in the coming months to look for any sign of what they will do. Most in the industry said they expected little change.

“There’s nothing to indicate that George Bush is going to appoint a soft antitrust chief,” said Ken Wasch, president of the Software & Information Industry Assn. “Under Al Gore, I don’t see it either.”

Indeed, both candidates took pains Monday to remain studiously neutral. Neither the vice president’s office nor his campaign staff had anything to say on the matter.

“It’s a live case,” explained Doug Hattaway, a Gore spokesman. Bush released a statement saying it would not be appropriate to comment.

Both men know from experience how volatile the issue can be. The Texas governor raised a minor storm earlier this year after industry insiders interpreted some comments he made before the Washington state primary as a sign of favoritism toward Microsoft.

Bush said he was “worried” the company would be broken up, describing it as “the great fear” in the case. His advisors spent the next week clarifying the statement and insisting on Bush’s devotion to the rule of law.

For his part, Gore visited Microsoft’s Redmond, Wash., headquarters only days after U.S. District Judge Thomas Penfield Jackson made his finding of fact that the company had engaged in anti-competitive practices.

While Gore avoided any direct comment on the trial, he reminded workers that competition was a fundamental American value.

“If competition is valuable, which I think it is, then antitrust laws have a place in embodying the values of our country,” Gore said at the time. “If one area is used to prevent that competition in another area, that’s wrong.”

Based on campaign contributions, the case is already very much a part of the political landscape.

Microsoft is the sixth-largest corporate contributor to soft money funds that both the Republicans and Democrats are relying on for victory in November.

In the 2000 election cycle, Microsoft has given $300,850 in soft money to Republicans and $218,250 to Democrats, according to FECInfo, an online service that tracks such donations.

Individual Microsoft employees have donated $34,450 to the Bush campaign and $21,250 to the Gore campaign this year, according to Campaign Study Group, another outfit tracking contributions.

Besides the money, the voters in the technology industry may play a role as well in this year’s election.

A recent Pew poll found that a large chunk of independents are so-called New Prosperity moderates whose wealth comes from the technology sector.

Alienate anyone in that group, and the candidates could lose precious votes in November, an election that now remains very close.

“Silicon Valley is all over the map. Not one party owns them,” said Sherry Bebitch Jeffe, a political analyst with Claremont Graduate University. “Silicon Valley has not committed itself to one party or candidate.”

Times researchers Massie Ritsch and John Jackson contributed to this report.

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