Antitrust Chief to Quit; Microsoft Case in Flux

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.