WASHINGTON, D.C. – In a letter to Assistant Attorney General Joel I. Klein today, Association for Competitive Technology (ACT) President Jonathan Zuck urged him to reconsider any extreme interventions into the IT industry.
ACT’s letter came as a response to news reports today that revealed that the Department of Justice may be about to spend hundreds of thousands of dollars on an analysis that details how to break up Microsoft, despite overwhelming opposition from the IT industry and the public. While the reports show that the Department approached at least two technology investment banks, they also note that neither firm agreed to do the study because of the business community’s opinion that sees the DOJ’s action as interventionist.
“These firms’ reluctance to participate in this intervention is telling,” Mr. Zuck said in the letter. “It is likely that the only companies who would support such an endeavor are those that stand to gain handsome financial rewards from a Microsoft breakup.”
ACT has followed closely the Department of Justice’s case against Microsoft and found that radical measures, such as dismantling the company, are not only unprecedented but would bring extreme harm to consumers, the IT industry and the U.S. economy. ACT’s legal analysis, economic study, and industry survey noted several key findings:
Extreme measures are legally unjustified. An analysis by noted antitrust authorities revealed no legal precedent for a breakup and that it would lead to ongoing regulation of the U.S. tech industry.
Divestiture is bad for the industry and bad for consumers. An economic analysis showed that consumers will pay the price of a $30 billion increase in software costs if Microsoft is split into multiple companies or is forced to license its code.
IT executives do not support extreme measures. An independent industry survey shows that IT executives overwhelmingly oppose (63 percent) a Microsoft breakup.
“With this evidence already available, it is baffling to me why the Department of Justice would be eager to spend hundreds of thousands more dollars on this case on what boils down to a fool’s errand,” Mr. Zuck said. “Even without this kind of in-depth analysis, it is clear that the costs of such an extreme intervention into today’s dynamic technology industry would outweigh any potential benefit. I urge the DOJ to allow the IT industry to continue on its path of service and value to the American consumer,” he added.
Competitive Technology is an industry trade association representing businesses and professionals in computer software and hardware development, and consulting and Internet services businesses. Protecting the freedom to achieve, compete and innovate, ACT is dedicated to preserving the role of technology companies in shaping the future of the industry.
