[Am-info] Antitrust Chief to Quit; Microsoft Case in Flux

[Mitch Stone]

http://www.latimes.com/business/la-fi-antitrust4oct04,0,4969306.story?coll=
la%2Dheadlines%2Dbusiness

Antitrust Chief to Quit; Microsoft Case in Flux
By JUBE SHIVER Jr., TIMES STAFF WRITER

WASHINGTON -- Justice Department antitrust chief Charles A. James said 
Thursday that he would step down after less than a year and a half on the 
job, leaving the landmark Microsoft Corp. settlement and several other key 
cases in flux.

James, who was confirmed by the Senate as assistant attorney general in 
charge of antitrust 14 months ago, will become vice president and general 
counsel of ChevronTexaco Corp., the nation's second-largest oil company, 
on Dec. 9. He will leave his government post around Thanksgiving.

Big businesses, especially Microsoft, may lament the departure of James, 
48, whom critics accused of going easy on the software giant and harboring 
a lenient attitude toward antitrust enforcement.

Although the Microsoft case may be wrapped up before James leaves, his 
replacement probably would play a key role in enforcing any court-ordered 
antitrust remedies against the company. A ruling in the 4 1/2-year-old 
case is expected any day.

Several other major antitrust cases also are pending, including probes of 
alleged airline industry price fixing; Hollywood's bid to sell music and 
movies online; and a review of the proposed $15-billion merger of the 
nation's two main satellite-TV providers, EchoStar Communications Corp. 
and DirecTV.

Atty. Gen. John Ashcroft did not immediately nominate a replacement for 
James. And the Senate, which will recess just weeks after James' departure,
  could take two to three months to confirm a new antitrust chief.

Speculation about possible successors focused on William J. Kolasky, a 
Washington antitrust lawyer who serves as James' deputy for international 
affairs. He is a political supporter of Sen. John McCain (R-Ariz.).

If nominated and approved, Kolasky would possibly have to recuse himself 
from the Microsoft case because he filed a friend-of-the-court brief two 
years ago on behalf of a group of software developers that supports 
Microsoft.

How the business community would be affected by James' departure is 
unclear, said Jeffrey A. Eisenach, a director of the Washington-based 
Progress & Freedom Foundation think tank who served as a Federal Trade 
Commission economist during the Reagan administration.

"But I don't think Microsoft is likely to find a friendlier antitrust 
chief than Charles James," he said.

Experts say James' resignation could prolong the Justice Department's 
review of the proposed merger of EchoStar and DirecTV. Representatives of 
DirecTV parent Hughes Electronics Corp. in El Segundo met with Justice 
Department staffers last week and were scheduled to confer again today as 
they try to gain the department's blessing.

James is opposed to the merger, which would reduce the number of U.S. 
satellite TV providers from three to two. Though his successor could share 
that view, Hughes would welcome the additional time it may get to win 
political support.

James drew both praise and scorn for his efforts to streamline antitrust 
enforcement. He leaves a Justice Department whose clout and stature have 
grown considerably during the last decade amid an explosion of corporate 
mergers and the rise of the global economy.

Among James' achievements are a reorganization of Justice Department staff 
and improved coordination of antitrust enforcement with regulators 
overseas.

But James was forced to mothball a controversial bid to formally divide 
corporate merger reviews between the Justice Department and the FTC.

James also has been dogged by criticism that he is not an aggressive 
antitrust enforcer, even though he pursued several big antitrust cases 
that began during the Clinton administration. This year, he asked a 
federal judge to reinstate a price-fixing case against AMR Corp.'s 
American Airlines.

James has largely weathered his controversial efforts to settle the 
landmark Microsoft antitrust case.

The proposed settlement calls for Microsoft to disclose the technical 
details of its Windows operating system software that enable it to work 
with products from rival software developers.

The plan is endorsed by half of the original group of 18 states that 
joined the federal government in pursuing an antitrust case against 
Microsoft, whose Windows software controls more than 90% of all personal 
computers. But some critics, including California Atty. Gen. Bill Lockyer,
  say the settlement is riddled with loopholes and are pressing for tougher 
remedies.