The Microsoft case and the future of public service

Joel Klein, the assistant attorney general in charge of the Antitrust Division of the Justice Department, spent time with National Journal Group reporters recently discussing everything from from his closely watched case against Microsoft Corp. to the future of public service. The following are excerpts from that session.

Q: To what extent did you advise the White House or consult with the White House before bringing the Microsoft case? And is the fact that we are in an election year and a new President might take us in a different direction or have a different view of that case-does that affect your thinking?

A: It doesn't. First of all, we advised the White House on the morning we filed the Microsoft case. We simply told them that the case was being filed that day-that is the only contact and that is inherent, I think, in the way we do law enforcement at the Justice Department.

You never know what is going to happen in a new administration, but I believe pretty strongly in the kind of continuity and commitment to law enforcement in the Department of Justice, and I am quick to point out that the original AT&T case was brought by the Nixon administration. It was prosecuted strongly by the Carter administration. It was settled with insistence on the structural remedy by the Reagan administration over great political objection inside that administration. The Secretary of Defense and the Secretary of Commerce were publicly identified as going out and opposing the suit and trying to insist that it be dropped. So I have a pretty strong conviction that the roots of law enforcement are remarkably well planted in the Justice Department, and we'll see continuity of law enforcement.

Q: How much of your and the department's resources and time over the past three years has been devoted to the Microsoft case?

A: In terms of the overall department resources, quite small. I forget the numbers, but we have a budget of around $100 million, so over three years it's $300 million. ... I would expect Microsoft, certainly, in that three years would be $5 [million] to $6 million. Don't hold me to that, but that's the kind of range, so that's quite small. My own time, I would say, probably in the past three years, [was a] maximum of 10 percent....

Q: When did you decide what remedy to seek?

A: After the trial was over, I brought in a team of consultants. I formed an internal team. I did a lot of consulting in that process and focused on benefits and burdens of different kinds of remedies. ... I became convinced based on the record of the case that there was a significant competitive problem here ... and I came to the conclusion that it was better for the market and for consumers [to seek] a structural remedy rather than to try to regulate.

Q: Polls suggest that consumers are not happy with what you have done in Microsoft. Does that trouble you at all?

A: The one thing I'm absolutely certain of is if you polled all Americans, they wouldn't want law enforcement to be done on the basis of polls. It's not a business that we can be in. I do think it wouldn't surprise anybody if you looked back at the polls during the time of the AT&T [divestiture]; I think the numbers were probably much stronger negatively.

Q: Do you expect the Antitrust Division's internal management and tactics and strategy to change, once there are competing architectures in the high-tech electronic commerce area? Do you expect more inquiries? Do you expect to cut your budget?

A: I don't expect we'll be able to cut our budget for two principal reasons. Whatever happens in the market, I don't see a significant abatement of merger activity.... And second, at least for the next several years I expect our criminal cartel enforcement program, which is extraordinary, is going to have to go forward.... We have a budget of $110 million, and last year we brought in to the Treasury just in criminal fines somewhere in the neighborhood of $1.1 billion.

Q: You've been in Washington a long time, and with the Clinton administration for seven years. What have you learned in that experience that is most important to you? What is it that you wish the public at large knew about how the government really operates and doesn't operate?

A: The thing that worries me the most and worries me a lot is ... cynicism [toward government]. Let me tell you one story. I am up at MIT teaching a whole bunch of computer science students on the role of government and technology ... and 40 minutes into it, a student raises his hand and says, "I don't get it," and I said, "What's that?" and he said, "You seem to be bright. How can you be with the government?"

Putting aside the narcissism in telling the first half of the story, the point is that I really worry about people not understanding that as important as dot.coms are and the excitement of the private sector right now ... there used to be a time when government service fit into a higher calling.... Students [often say] government is corrupt, government doesn't do anything. And that can become a self-fulfilling prophecy.... If you have a great market-based economy without the infrastructure of a sound government deciding some of the biotechnology issues that we are going to need to deal with, the digital divide issues that worry me enormously ... those are going to require the best and the brightest.