Act accordingly

John Tunney was an expert on boxing matches long before the United States Department of Justice and Microsoft put the gloves on, but he probably didn’t expect to write a document that could determine who is left standing in the ring.

Tunney, who was a U.S. Senator from California from 1971

to 1977, might have been a footnote in the annals of Nixon-era history were it not for the eponymous Tunney Act of 1974. Though it is an American law, the Tunney Act is a little-understood piece of legislation that sits at the heart of Microsoft’s antitrust trial. As U.S. District Judge Colleen Kollar-Kelly spent Wednesday listening to the software company pitch a settlement, it is worth taking a moment to explain the Tunney Act’s significance to Canadian IT professionals who could be affected by her decision.

The intricacies of the Tunney Act recall the dense legal details of the Whitewater case against former U.S. president Bill Clinton in the 1990s. The Microsoft case isn’t like the O.J. Simpson trial, where there was an obvious tabloid interest around a single celebrity. And yet during his time in office, John Tunney was considered a colorful character, though perhaps less colorful than O.J. He was the son of a heavyweight champion, Gene Tunney, known for his good looks, Kennedy-style politics and relentless ambition. A profile of him after his Senate victory in the Los Angeles Times described him as “”a case study in upward mobility . . . (handsome) enough to turn female heads . . . an echo of Camelot.””

Though his appearance became as much a liability as an asset, Tunney’s law carried the substance he had been said to lack. Before the Microsoft case, the Tunney Act was best known as the legal instrument that led to the breakup of AT&T. In creating it, Tunney seemed well aware of the back-room manipulation that goes on between governments and major companies. That’s why it includes disclosure provisions to ensure that a company settling antitrust charges doesn’t get favors from government employees. Specifically, it says the companies in question must reveal “any and all written or oral communications” with “any officer or employee of the United States” related to the settlement.

This became an issue just a month ago, when Microsoft was slapped on the wrist by the American Antitrust Institute (AAI) for failing to make all the necessary disclosures. The AAI said Microsoft only talked about its contracts with the executive branch, not Congress. Microsoft responded that AT&T acted no differently in its case. This brought Tunney himself out of the woodwork: he wrote to the DoJ that he intended his act to apply to all government employees, including members of Congress and even their aids. There was some brief hope that this point of conflict would temporarily bring Microsoft’s settlement push to a halt, but the momentum to resolve this case is too strong.

The Tunney Act also requires Kollar-Kelly to approve any settlement between Microsoft and the DoJ. In one critical respect this will be a first, because no case under the Tunney Act — even AT&T — has ever gone to trial. In this case, the court has already ruled Microsoft operated an illegal monopoly. Should Kelly endorse the settlement, the nine states that are looking for tougher penalties will be handicapped. If she doesn’t, expect the two sides to come out swinging for a KO.

If she is truly interested in the public interest, it behooves Kollar-Kelly to at least listen to the sanctions the nine states seek in more detail before rendering such an important decision. John Tunney may never have imagined the title bout we’re watching now, but he has given the judge a powerful tool with which she could do some good. Let’s hope she uses it before we reach the final round, when it will be too late.

sschick@itbusiness.ca

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