“We as a nation put too much faith in the free market and not enough faith in government,” Joel Klein said at the start of his lecture yesterday in Hutchins Hall.
Klein, the former head of the Antitrust Division of the U.S. Department of Justice and now the chief executive officer of the Bertelsmann media company, gave the William W. Cook lecture at the beginning of a three-day conference at the Law School titled “Law, Policy and the Convergence of Telecommunications and Computing Technologies.”
Klein was the lead attorney in the Justice Department”s successful antitrust lawsuit against the Microsoft Corp. last year. The department successfully convinced U.S. District Judge Thomas Penfield Jackson to order a break-up of the software company, although an appeal is currently underway before the U.S. Court of Appeals.
During the lecture, Klein said too many people underestimate or undervalue the role of government. But he also stressed that there are certain limits as to where and when the government should begin to regulate business.
Klein said what is important is “how we create a society where markets do what they do best and governments do what they do best,” adding that without government intervention, too many companies would be able to merge and thus gain a monopoly in their respective markets.
He also said the two most important violations of antitrust law that must be prosecuted are exclusionary behavior, which, he said, “is simply behavior that prevents the competition from getting their product out,” and predatory behavior, in which established companies temporarily lower prices to force competitors out of business.
The former assistant attorney general said Microsoft exhibited examples of both types of behavior, first in requiring computer companies that wanted to purchase its operating system to also purchase other software from the company, and second in giving away its Web browser, Internet Explorer, for free.
Although he said he rejects the notion that “we now face a new economy, a technological economy, and so the antitrust enforcers should stay their hands,” he added that it was likely in the new economy there would be several temporary monopolies. But, he added, “the Microsoft monopoly has been in effect for decades and there is no end in sight. Now they have a new monopoly in browsers.”
The last part of Klein”s lecture was devoted to, in his opinion, a wide-ranging cynicism toward government, part of which he said may be due to “the politics of personal destruction.”
Kurt Cobb, a communications consultant to nonprofit agencies from Kalamazoo, said he found Klein”s lecture remarkably easy to understand.
“I recall those days when he was on television at night and he was surprisingly much more effective than the Microsoft representatives who were then making their case,” Cobb said.
]”It”s pretty unusual to find somebody in the government who can make their case so clearly and compelling. They tend to be more technical.”
Law school alum and Western Michigan University business law Prof. F. William McCarty had a similar reaction to Klein.
“I think he made a nice balance because he gave due to the markets and technology and the free market system and I did not view his talk as indicative of that we should have a lot of government regulation but I think the point he was trying to make is that we should not go to the other extreme,” McCarty said.