For The Observer/Guardian UK
You want to be a billionaire? Answer this one: What do Blackbeard, the Butcher of Croatia and Bill Gates have in common?
While the money clock ticks away, let me tell you about my weekend. I spent it at the Sheraton Hotel in Brussels, watching the guests shuttle between rooms. It looked a little like love, but maybe it meant nothing more to them than a couple nights of fun. There was Steve Ballmer, new CEO of Microsoft, and a thousand of his closest commercial and government friends, meeting under the guise of the ‘European Business Summit’.
In the ballroom I modestly averted my gaze as a EU Commissioner told the executives how to form ‘strategic alliances’ between corporations. The instructor was, of all people, Mario Monti, head of the EC’s Competition Directorate, putative protector of the public from cartels and monopolies.
Only three days before, a US judge, Thomas Penfield Jackson, ruled that Microsoft had bullied its way to a software monopoly by deceit, coercion and software sabotage. And here was Monti submitting to Microsoft-sponsored indoctrination on ‘Promoting Innovation’, the company’s latest PR cover phrase for its none-too-kosher business practices.
Several hundred riot-ready police ringed the hotel. Their water cannons and scores of black armoured transports, looking like the attack bugs from Star Wars, protected us not from the football crazies massing that evening, but from the threat of pastry. Rumour had it that Noel Godin, who once whacked Gates with a custard pie, would lead a thousand anti-globalisation bakers on a whipped-cream rampage against the summit.
But the night before its start, the Belgians arrested Godin and 68 suspected sous-chefs. Still, a thousand pie-less demonstrators showed up, herded so far away that, from the Sheraton’s banqueting room, they looked like a swarm of frustrated ants.
Now the ants have some powerful allies. For nearly a year, in secret meetings in London, a band of lawyers from six continents have planned an unprecedented multi-national assault on corporate monopolies. It’s all big guns, including Princess Diana’s lawyers, Mishcon De Reya, and the firm of David Boies, who slew Microsoft for the US Justice Department. With a bit of understandable drama, they’ve named themselves the Global Anti-Cartel Network.
Last year, in an exclusive interview with The Observer , Boies caused a little storm in Microsoft’s home town of Seattle by suggesting that every British purchaser of a Windows computer could claim a cash refund in US courts as a victim of Gates’s monopoly. This week, the Anti-Cartel Network did just that, filing suits on behalf of those hundred million or so ants toiling on the Windows cyber- plantation outside the US. If the Network wins, expect a cheque for £20 or so. (Boies, however, is sidelined from this action because of his government work.)
Microsoft is merely the Network’s first dragon. According to Mike Hausfeld of Washington, the Network’s chief lawyer, the 30 law firms are about to make legal history by hitting several price-fixing monopolies with suits demanding compensation under Britain’s own anti-monopoly laws.
That’s revolutionary because the right of consumers to obtain recovery from cartels is, like so many privileges under English law, constructed in such a way that no one has ever dared assert their rights. In the past 100 years the number of British consumers who have won compensation from price-fixing rings is exactly zero.
It’s the same mad story in Europe. For example, the FBI secretly filmed French and US biotech companies fixing the price of pig feed. The companies confessed and paid American customers several hundred million dollars. For Britain’s bacon-munching citizens the conspirators offered two fingers and a grin.
Time for change? The Network thinks so. Within weeks it plans to hit the crew you’ve suspected of rip-offs for years – the big five music companies, whom the Network alleges have conspired to keep the price of CDs above £10 a disc.
Maybe you’re thinking an invasion of US lawyers into Blighty is a mixed blessing. You could, of course, leave it to HM Office of Fair Trading to protect you from corporate marauders. But how does the OFT’s record look? Last month the US Federal Trade Commission forced Sony, EMI, Warner, BMG and Polygram/Universal to end market manipula tions that hiked CD prices by $2 a disc.
Even the Italians fined the companies. Yet, somehow, the sleuths at the OFT found no fix at all in CD sales. One US investigator characterised the OFT’s efforts thus: ‘It was really so lame . I mean, it was so poorly conceived it was a chuckle . You have to laugh – it was, like, so unscientific.’
The embarrassed OFT has now requested copies of the screaming evidence of price-fixing from US court proceedings. While this could represent an unexpected life-pulse in the old agency, it is more likely to be the eerie post-mortem twitching of a bureaucratic corpse.
Whichever it is, the only way to get justice – and cash back on your CD and Windows purchases – is through the Network’s unprecedented two-front strategy: one, to sue in London courts; the other, to sue under UK law for trial in an American courtroom.
That’s where the case of the Butcher of Croatia, Andrija Artukovich, comes into play. When Artukovich, a puppet potentate of the Nazi regime, was forced into retirement, he chose, like other cut throats, movie stars and estates agents, to settle in southern California, presumably free from retribution. But in 1980 his surviving victims hit the Butcher with a law suit under America’s Alien Claims Torts Act. George Washington signed this law in 1789, declaring America, barely a nation, to have legal jurisdiction to bring to trial and obtain reparations of any ne’er-do-well who violated ‘accepted international standards of con duct’ – what today we call human rights.
Washington had in mind Blackbeard and other pirates on the high seas, but Hausfeld and his Network sidekick Martin Mendelsohn, who nailed Artukovich with the novel use of the Act, have more recently used it to lighten Siemens, Volkswagen and others of a billion pounds to compensate those enslaved in their factories to work for Hitler’s war machine – though neither the guilty companies nor the victims are American.
‘We have established that there are certain norms, recognised in the laws of every nation, that raise them to the level of international law,’ explained Hausfeld. Among these are universal prohibitions – on the code books, if not in practice – against piracy, slavery, genocide and monopolistic manipulations of the marketplace.
‘Cartels and monopolies are the new pirates,’ said Hausfeld.
Microsoft’s response is a frantic procedural dance to stall both the Network’s civil suits and the Justice Department’s carving knife just long enough for Gates legally to buy himself a new president.
Republicans promise that, once in the White House, they would change the US judiciary to something a bit more friendly to software barons. And that, by the way, is how you can tell the difference between Blackbeard and Gates.
Blackbeard’s the one with the eye-patch and a parrot on his shoulder. Gates wears eye glasses and George W. Bush on his shoulder.
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Gregory Palast’s other investigative reports can be found at www.GregPalast.com where you can also subscribe to Palast’s column.
Gregory Palast’s column “Inside Corporate America” appears fortnightly in the
Observer’s Business section. Nominated Business Writer of the Year (UK Press
Association – 2000), Investigative Story of the Year (Industrial. Society – 1999), Financial Times David Thomas Prize (1998).
For The Observer/Guardian UK