Justice Department Willing to Reduce Limits on IBM Marketing
The Justice Department tentatively agreed Wednesday to end 39-year-old restrictions on IBM’s marketing of the vast majority of its products, but sought more information before deciding whether the limits still should apply to two computer systems.
In a 56-page brief filed in U.S. District Court in New York, the department’s antitrust division provided a preliminary response to the company’s motion to end a consent decree issued by the court on Jan. 25, 1956. The court decree settled government allegations that International Business Machines Corp. had engaged in monopolization and agreements in restraint of trade that had allowed it to corner 90% of the market in tabulating machines.
“We would not oppose termination insofar as the decree now applies to all of IBM’s current personal computer or work station computer products,” the government said.
Both sides concede that the decree applies to electronic data processing now performed by computers that have long since replaced adding machines as IBM’s main business. IBM contends the decree does not apply to the software that operates computers; the government says it does.
The decree requires IBM to sell as well as lease computers; to treat those who buy its computers the same way it treats those who lease them; to sell to used equipment dealers, and to meet standards for its servicing business.
The court order bars IBM from forcing its computer customers to obtain repair and maintenance from IBM only; from limiting the ability of IBM computer users to experiment with their machines; from agreeing with competitors to allocate markets and restrain imports, and from conditioning the sale or lease of one product on the sale or lease of another.
Pending an analysis of any public comments, the government said data from a limited investigation of industry conditions “permit us to consent . . . to termination of the judgment in its application to the vast majority of IBM’s products and operations.”
But the antitrust division said it needs an in-depth investigation to decide whether the decree should still apply to IBM’s System-390 and AS-400 families of computers and software.
