[Federal Register Volume 60, Number 185 (Monday, September 25, 1995)]
[Notices]
[Pages 49421-49422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23671]
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DEPARTMENT OF JUSTICE
Antitrust Division
[Civil Action No. 72-344 (AGS)]
United States v. International Business Machines Corporation;
Proposed Final Judgment Termination
Take Notice that International Business Machines Corporation
(``IBM''), defendant in this antitrust action, has filed a motion for
an order terminating the final judgment entered by the United States
District Court for the Southern District of New York on January 25,
1956 (the ``Final Judgment''). The United States of America, plaintiff,
has tentatively consented to IBM's motion in certain respects, but has
reserved the right to withdraw its consent for at least 90 days after
publication of this Notice. The Complaint, Final Judgment and proposed
termination are further described below.
This Notice relates solely to those aspects of the Final Judgment
to which the United States has tentatively consented to termination. A
further notice will be published before any action on IBM's termination
motion as it applies to the remainder of the Final Judgment. Prior to
entry of an order terminating any aspect of the Final Judgment, the
Court and the parties will consider public comments. Any such comments
on the proposed terminations described in this Notice must be filed
within 60 days.
The Final Judgment was entered by consent between IBM and the
United States, settling an action filed on January 21, 1952. The
Complaint in that action alleged that IBM had monopolized, attempted to
monopolize and restrained trade in the tabulating industry, in
violation of Sections 1 and
[[Page 49422]]
2 of the Sherman Act. Among other things, the Complaint alleged that
IBM had restrained the development and growth of: other manufacturers
of tabulating machines, attachments for tabulating machines and
tabulating cards; businesses involved in the purchase and sale of used
tabulating machinery; independent service bureaus; maintenance and
repair businesses and parts businesses. The Complaint alleged that IBM
only leased, and refused to sell, tabulating machines. Through its
lease agreements, IBM allegedly: charged lessees a single price for
machine rental, instruction and repair and maintenance; limited machine
uses; restricted attachments to, alterations in, or experimentation
with such machines; and required grant backs of any inventions
resulting from a breach of the prohibition on experimentation. The
Complaint alleged that IBM operated its service bureaus to preempt
demand for the products of other manufacturers and restrained the
growth of independent service bureaus by discriminating in favor of its
own service bureau.
The Final Judgment applies to IBM's conduct with respect to
tabulating machines and cards, both of which IBM has not manufactured
for many years, and ``electronic data processing machines.'' Certain
provisions of the Final Judgment have expired or no longer apply to
IBM's business. However, other provisions of the Final Judgment
continue to apply to IBM's electronic data processing machine business.
The United States has tentatively agreed to terminate certain
sections of the Final Judgment in their entirety: (a) Sections V(b) and
(c), which require IBM to offer to sell at no more than specified
prices and for a specified period used IBM machines that IBM acquires
pursuant to trade-ins or as a credit against sums then or thereafter
payable to IBM; and (b) Section VIII, which specifies conditions under
which IBM may engage in ``service bureau business,'' as defined by
Section II(k) of the Final Judgment. Section VIII requires IBM to
conduct its service bureau business through a subsidiary that is
required to charge prices for services it renders based upon rates that
fairly reflect all expenses properly chargeable to the subsidiary,
except that the service bureau subsidiary may reduce any price to meet
a competitor's price. Section VIII also prohibits IBM from providing
machines to its service bureau subsidiary except on the same terms and
conditions that are available to other service bureaus.
The United States also has tentatively agreed to terminate all
other provisions of the Final Judgment except as they apply to the
System/360 . . . 390 and AS/400 families of products and services
(insofar as such services are affected by Sections VI, VII, IX and XV
of the Final Judgment). These other provisions of the Final Judgment,
among other things: (a) to fulfill the purposes of the Final Judgment
in assuring to users and prospective users of IBM machines an
opportunity to purchase those machines on terms and conditions that are
not substantially more advantageous to IBM than the terms and
conditions for leases of the same machines, require IBM to sell its
machines at prices that have a commercially reasonable relationship to
the lease charges for the same machines; (b) restrict IBM's ability to
reacquire previously sold IBM machines; (c) require IBM to offer to
machine owners at reasonable and nondiscriminatory prices repair and
maintenance service for as long as IBM provides such service, provided
that the machine has not been altered or connected to another machine
in such a manner that its maintenance and repair is impractical for
IBM; (d) require IBM to offer to machine owners and to persons engaged
in the business of providing repair and maintenance services, at
reasonable and nondiscriminatory prices, repair and replacement parts
for as long as IBM has such parts available for use in its leased
machines; (e) restrain IBM from requiring that lessees or purchasers of
IBM machines disclose to IBM the uses of such machines, from requiring
that purchasers of IBM machines have those machines maintained by IBM
and generally from prohibiting experimentation with, alterations in or
attachments to IBM machines; (f) require IBM to furnish to owners of
IBM machines certain manuals, books of instructions and other documents
relating to IBM machines that IBM furnishes to its own repair and
maintenance employees; and (g) require IBM to furnish to purchasers and
lessees of IBM certain manuals, books of instruction and other
documents that pertain to the operation and application of such
machines.
IBM and the United States have each filed with the Court memoranda
setting forth their respective positions. Copies of the Complaint, the
Final Judgment, the Stipulation containing the Government's tentative
consent, the memoranda and all over papers filed in connection with
this motion are available for inspection at the Office of the Clerk of
the United States District Court, Southern District of New York, United
States Courthouse, 500 Pearl Street, New York, New York 10007 and at
Suite 215, Antitrust Division, Department of Justice, 325 7th Street
NW., Washington, DC 20530 (Telephone 202-514-2481). Copies of these
materials may be obtained from the Antitrust Division upon request and
payment of the copying fee set by the Department of Justice.
Interested persons may submit comments regarding this matter within
the sixty (60) day period established by Court order. Such comments
must be filed with the Office of the Clerk of the United States
District Court, Southern District of New York, 500 Pearl Street, New
York, New York 10007 with copies mailed at the time of filing to: (a)
counsel for IBM, Peter T. Barbur, Esq., Cravath, Swaine & Moore,
Worldwide Plaza, 825 Eighth Avenue, New York, N.Y. 10019; and (b)
counsel for the United States, Kent Brown, Attorney, Computers &
Finance Section, Antitrust Division, United States Department of
Justice. Judiciary Center Building, Suite 9901, 555 4th Street NW.,
Washington, DC 20001 (Telephone 202-307-6200).
Rebecca P. Dick,
Deputy Director of Operations.
[FR Doc. 95-23671 Filed 9-22-95; 8:45 am]
BILLING CODE 4410-01-M
