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Press Reports: U.S. Justice Dept. Opens IBM Antitrust Probe
Major press organizations, such as Reuters, the Associated Press, and the Wall Street Journal, are reporting comments from Ed Black, chairman of the Computer and Communications Industry Association. "We are aware that Justice has begun the CID investigatory process," said Black. (A CID is similar to a subpoena and would indicate that the Justice Department has begun a preliminary investigation of the CCIA's complaints.) According to the press reports, the Justice Department is specifically investigating IBM's mainframe business.
The CCIA is an industry lobbying organization funded by IBM competitors including Microsoft. According to Computerworld (citing the Financial Times), in 2004 the CCIA dropped its antitrust complaint against Microsoft in exchange for Microsoft paying $19.75 million to the organization. Half that amount went to Black personally, according to the report. CCIA member Nokia pulled out of the organization, with Nokia's spokesperson saying at the time, "The settlement content and process were inappropriate."
The U.S. Justice Department has investigated IBM previously and thoroughly for decades, starting at least as far back as the 1950s and including many years when IBM and its mainframe business had a far greater marketshare. However, in 2009, Microsoft's software revenues are triple IBM's, Hewlett-Packard (one of many direct competitors) has passed IBM as the highest revenue technology company, and even Apple's stock market value is greater than IBM's. The Justice Department dropped its previous case in the early 1980s as the personal computer era began.
So far IBM has not commented on the reports.
Update #1: According to MarketWatch, an IBM spokesman said in a statement that the company "intends to cooperate with any inquiries from the Department of Justice."
Update #2: The New York Times reports that a New York federal district judge already dismissed the antitrust complaint against IBM last week. (The plaintiff, T3 Technologies, plans to appeal. MarketWatch reports that Microsoft invested in T3.) The Times quotes more of IBM's statement: "We continue to believe there is no merit to T3’s claims. We understand the Department of Justice has asked T3 for documents from the litigation. IBM intends to cooperate with any inquiries from the Department of Justice."
It is unclear to me why the D.O.J. might be intervening in a civil antitrust case that has already been heard (and dismissed) in federal court, with an appeal pending.
Update #3: The Associated Press has an updated story containing a bit more of IBM's statement. Here's the additional sentence: "We continue to believe there is no merit to T3's claims, and that IBM is fully entitled to enforce our intellectual property rights and protect the investments that we have made in our technologies."
Update #4: Editorial reaction is starting to appear. CNBC's Dennis Kneale: "This anti-capitalist crusade is especially wrongheaded — and utterly ridiculous — in the case of IBM...."
| by Timothy Sipples | October 7, 2009 in Current Affairs Permalink |
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Comments
Hi,
Thanks for this update.It is very concerning matter for the IBMers.We will see some stranged facts soon.
Posted by: bluetooth freisprechanlage | Oct 8, 2009 6:11:20 AM
the DoJ? That's one of Oracle's recent acquisitions isn't it? ;-)
Posted by: james governor | Oct 9, 2009 12:00:50 PM
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