Political machinations in the Valley affect us all

It has been a bizarre year, and nothing has been more bizarre than the progress of the Microsoft anti-trust case. After a decade...

It has been a bizarre year, and nothing has been more bizarre than the progress of the Microsoft anti-trust case. After a decade of investigations, trials and appeals, it is still not clear how it will end, or whether users will benefit from the millions of dollars invested in it.

One thing that has become increasingly obvious is how much of the case is political. It might never have been brought in the first place if it had not been seen as a payback for Silicon Valley backing the Clinton/Gore administration, and the arrival of Dubya Bush has clearly changed the agenda.

For those who weren't watching, Bill Clinton was endorsed by Larry Ellison of Oracle, John Sculley of Apple, Gil Amelio of National Semiconductor, John Young of Hewlett-Packard, Ed McCracken of Silicon Graphics, Mitch Kapor of Lotus, and many others. Ellison said he was "departing from my lifelong support of the Republican party to endorse the Clinton-Gore ticket" while Sculley said, "I'm still a Republican, so I haven't changed parties."

Either way, a bunch of Microsoft's enemies changed their backing from Republican to Democrat in a key state, and some of them chipped in cash as well. Although there would not have been any formal agreement, the mutual back-scratching certainly encouraged the Clinton administration's assault on the non-Valley Microsoft.

While there is no evidence of any collusion between Microsoft and the Bush administration, Clinton's departure changed the political scene, and thus the Justice Department's approach. Republicans are generally thought to be in favour of big business and against anti-trust cases, - witness, for example, Reagan's dumping of the anti-trust case against IBM. From a practical point of view, the changed economic climate must also have suggested that it was no longer a good idea to keep shovelling sand into one of the engines of the US economy.

Unfortunately, it seems unlikely that even Dubya Bush will try to throw out the whole of the US's anti-trust industry, even though there is no evidence that it does any good. For example, Milton Friedman, the famed free market economist, noticed that, "instead of promoting competition, anti-trust laws tended to do exactly the opposite", while Alan Greenspan, before he became chairman of the Federal Reserve Board, observed that, "The entire structure of the anti-trust statutes in this country is a jumble of economic irrationality and ignorance."

All the evidence compiled by leading economists shows that the US anti-trust laws, while perhaps noble in intention, have in practice been used to damage the US economy and the interests of US consumers. Now that we live in a global economy, they can be used to damage the interests of consumers in the UK as well.

So whether your company survives next year may depend on a lottery: the one used to pick Judge Colleen Kollar-Kotelly to settle the Microsoft case.

Jack Schofield is computer editor of the Guardian

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