Enforce antitrust now or regulate tomorrow, senator warns

High-technology companies must fully cooperate with current US antitrust policy -- or face calls for greater government intervention in business practices related to the online world, in the form of an Internet Commerce Commission, a US senator has warned. Senator Orrin Hatch, speaking to a conference of antitrust consultants, academics and lawyers, said that if the Internet becomes the underlying medium for commerce and if one company dominates it, then there will be calls from all corners for government intervention.

High-technology companies must fully cooperate with current US antitrust policy -- or face calls for greater government intervention in business practices related to the online world, in the form of an Internet Commerce Commission, a US senator has warned.

Senator Orrin Hatch, speaking to a conference of antitrust consultants, academics and lawyers, said that if the Internet becomes the underlying medium for commerce and if one company dominates it, then there will be calls from all corners for government intervention.

"Let me suggest to those of you who abhor the regulatory state that you give this some thought," said Hatch, a Republican from the state of Utah. "Vigilant and effective antitrust enforcement today is far preferable than the heavy hand of government regulation of the Internet tomorrow."

Chairman of the Senate Judiciary Committee, Hatch has expressed concern about Microsoft's power and has pledged to examine its practices. His committee, which makes decisions about antitrust and intellectual property issues, focused on Microsoft when it began hearings in November on e-commerce and Internet competition.

He described as misguided any suggestion by Microsoft and its "newfound friends" in Washington that technology is too complicated for the government to regulate. The government's responsibility is to make sure that the rules of the road are correct and that the referees do a good job enforcing them, he said.

Microsoft's backers in Washington include the former chairman of the Republican National Committee, Haley Barbour, and two former congressmen, in addition to the law firm of Microsoft Chairman and CEO Bill Gates' father, Preston Gates Ellis and Rouvelas Meeds.

Hatch said he applauds Microsoft for making dominance of the Internet a corporate priority and going after the "pot of gold" it represents. He also said the company has every right to try to prevent a shift to the Java programming language belonging to archrival Sun Microsystems, which threatens to undermine Microsoft's current dominance of the software market.

But he said at the same time that "this is precisely where the practices of a currently dominant firm, such as Microsoft, must be scrutinised, and where the appropriate rules of the road must be clarified and enforced."

Hatch also said questions have to be asked about tying arrangements -- such as Microsoft's offering of Internet Explorer as an integrated part of Windows 95 -- and about free product offerings and exclusionary licensing practices when practiced by an entrenched monopolist. If these actions lock out innovation and stifle competition, then the adequacy of current antitrust laws has to be questioned, he said.

The conference, arranged by the Progress & Freedom Foundation, a Washington-based conservative think tank that receives funding from many large software companies, was called to examine Microsoft's monopoly and future competition and convergence in the IT market.

The Progress & Freedom Foundation can be reached at http://www.pff.org/.

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