Borland Ordered to Share Key Software
The Justice Department, in approving Borland International’s acquisition of Ashton-Tate on Friday, imposed an unprecedented condition requiring that Borland make available to other companies the basic features of Ashton-Tate’s flagship software product.
The decision, which allows rivals to make similar versions of Ashton-Tate’s popular dBase database software, marked the first time the Justice Department has placed conditions on an acquisition based on copyright restrictions. Concerned that Borland and Ashton-Tate together would control 70% of the market for database software, the Justice Department said it had imposed the condition to “ensure the competitive vigor of the industry.”
Meanwhile, Borland said it had laid off 520 employees after Friday’s completion of the Ashton-Tate buyout, including 300 at the former Ashton-Tate facility in Torrance. More than 800 people have now lost their jobs as a result of the combination, and the Torrance facility will be shut down after a four- to six-month transition period, a Borland spokesman said.
Borland, based in Scotts Valley, Calif., also announced that it was discontinuing a number of Ashton-Tate products and that the restructuring charge for the acquisition would be higher than the $80 million originally estimated.
Ashton-Tate, a pioneer of the personal computer software industry and long the leading supplier of software for organizing large amounts of data, agreed to be acquired by rival Borland earlier this year after a string of losses. The company was plagued by technical problems in updating its database product, called dBase, and had failed to develop the rest of its product line.
In its ruling Friday, the Justice Department stipulated that the Borland acquisition could proceed only if Borland agreed to place dBase in the public domain, thus allowing any company to produce software that mimics some or all of dBase’s functions.
Previously, Ashton-Tate had pursued legal action against companies that used any features of dBase, even though many in the industry believed that the company’s copyright claims were weak. The Justice Department ruling requires Borland to settle a copyright lawsuit against Fox Software that is still outstanding.
Although the Justice Department’s action could create more competition for dBase, Borland said it was happy to put the software in the public domain on the grounds that it would help make dBase an industry standard. Borland is embroiled in a separate legal fight in which it is being sued by Lotus over a similar copyright issue.
