US Justice Department could suffer Microsoft "memogate"

Stan Beer
Monday, 11 June 2007 08:25

Opinion and Analysis

In what could turn into a major embarrassment for the US Government, the New York Times has reported that the US Justice Department's top antitrust official last month sent a memo to state prosecutors urging them to reject a confidential Google antitrust complaint against Vista. The report also noted that the official who issued the memo used to be a top antitrust partner at a law firm that has represented Microsoft in antitrust disputes.

The memo, issued by Assistant Attorney General Thomas O. Barnett, a former antitrust partner at Covington & Burlington, could well blow up in the US Government's face. Not only has it reportedly sounded alarm bells among state attorneys general, many of whom are now determined to pursue the Google complaint, but it highlights what could be viewed as an unhealthy bias of the current administration toward Microsoft.

The Bush administration is widely viewed as being behind the reversal in 2001 of an order to split Microsoft up. Although Barnett was a partner at Covington & Burlington, he apparently never worked on cases related to Microsoft at the firm and for more than a year excluded himself from the Microsoft antitrust case after joining the Justice Department in 2004.

However, the Barnett memo, which reportedly mirrors Microsoft arguments, is sure to raise the ire of cynics and lead to accusations of pro-Microsoft bias against the Federal Government. It has also focussed attention on Google's complaint which charges that Vista is designed to discourage the use of Google Desktop Search. The complaint will be heard in the US District Court in Washington this month.

To an outsider looking in, the revelation of the memo is an embarrassment to the US Justice Department and could potentially harm Microsoft's prospects of getting Google's complaint thrown out. Whatever the outcome of this month's Federal hearing, state governments have now signalled their intention to pursue Google's complaint.

Microsoft is not implicated in drafting or distribution of the memo and has reportedly distanced itself from the matter by stating through its general counsel Bradford L Smith that it is unaware of the Barnett memo. However, the memo could become a public relations disaster for the software company by focussing attention on its relationship to the US Government and away from its antitrust arguments, no matter how meritorious they are.

The matter has also raised questions of how a Democratic Party administration, led by say Hillary Clinton, may treat Microsoft in antitrust matters. It was the (Bill) Clinton administration which created the political climate in which a court ordered the split up of Microsoft for alleged anti-competitive practices.