MicroPolitics

microsoft antitrust
AP
Wednesday's U.S. district court ruling to split up Microsoft could eventually influence the country's antitrust laws. But the lawsuit against the software giant has already had a major impact on the financing of national political campaigns, and signaled a turning point in relations between the high-tech industry and the government.

During the 1995-1996 election cycle - the two years before the Department of Justice filed suit against Microsoft - the company contributed approximately $250,000 to political parties and candidates. By the end of the '97-'98 cycle, Microsoft's political contributions had increased almost six-fold, according to figures compiled by the Center for Responsive Politics, a nonpartisan organization that monitors special interest groups.

"That fall, they just started pouring money into elections. It (the lawsuit) was kind of the lightening rod that started it all," said Holly Bailey, a researcher for CRP, who tracks the growing influence of the high-tech industry.

Microsoft led the rush of software and computer companies that opened lobbying offices in Washington D.C. and continues to set the industry pace, contributing $2.2 million to political parties and candidates in the current election cycle.

The high-tech industry as a whole has given more than $13 million in soft money, PAC and individual contributions this campaign season, split almost evenly between Democrats and Republicans. That may explain why many members of Congress, as well as the major presidential candidates, either withheld comment on Judge Jackson's ruling or offered a middle-of-the-road response. Even candidates who may not benefit directly from Microsoft money may, like so many Americans, hold substantial investments in the company's stock.

Among the decision's most vocal critics were GOP congressional leaders, who hope to pin blame for the company's ills on the Clinton administration - and the Washington State congressional delegation, all of whose members have received money from Microsoft's political action committee.

Jackson's ruling "is not only extreme, it's wrong," said Rep. Doc Hastings, R-Wash. Hastings, who is not running for re-election, received $2,000 from Microsoft's PAC this year.

"This proposed breakup would not only cleave a creative team down the middle, but it would prevent those two halves from working together," said Rep. Jay Inslee, D-Wash., whose district includes the Microsoft headquarters in Redmond, Wash. Inslee's campaign has received $15,000 from the Microsoft PAC so far this campaign season.

Republican Sen. Slade Gorton predicted the issue would impact the presidential race in Washington State. "If Gov. Bush is elected president, in my opinion, the case will be settled in an amicable fashion within a year from today," said Gorton. The Microsoft PAC has contributed $10,000 to Gorto since the start of 1999.

Gorton's Democratic counterpart, Sen. Patty Murray, disagreed. "No one has said to me, 'This is Al Gore's fault,'" said Murray, who has received $4,000 from the Microsoft PAC.

The Justice Department's actions are not expected to influence many voters. And its effect on future legislation remains to be seen. In fact, Microsoft chairman Bill Gates has told Congress that antitrust laws don't need to be changed.

So what did the company's millions in campaign contributions achieve?

"The important thing to remember about this is the fight isn't over yet," said Bailey. "You have to wonder what the company's strategy is in dragging this out after the election."

Even if Microsoft loses this battle, a minefield of potential new government regulation lies ahead. In other words, don't expect the flow of campaign funds from the high-tech industry to dry up as a result of this case.

Said Bailey: "It doesn't hurt for anybody to have friends on Capitol Hill."