DOJ Fishing Expedition Spotted Off Silicon Valley
by John Paczkowski
Posted on June 3, 2009 at 6:36 AM PT
When Assistant Attorney General Christine Varney said she plans to take a more aggressive approach to antitrust enforcement, she wasn’t kidding. Under her leadership the US Department of Justice has opened an investigation into the recruiting practices at Google (GOOG), Apple (AAPL), Yahoo (YHOO), and Genentech (DNA), among others. At issue, so called “no-poaching” agreements, pacts under which companies promise to not actively recruit employees from each other. Such covenants, if they do indeed exist, could be a violation of the Sherman Act of 1890, which prohibits agreements among competitors that result in restraint of trade. As Albert Foer, president of the American Antitrust Institute, explained to The Washington Post, “This could be collusive restraint on trade, which could have a serious impact on competition.”
Indeed it could. Good luck proving it, though. Finding hard evidence that some of the nation’s largest tech firms have secretly negotiated agreements not to hire away each other’s top talent isn’t going to be easy. I can’t imagine there’s a paper trail of collusive memos between Steve Jobs, Eric Schmidt, Carol Bartz and Arthur Levinson. Then again, there’s no telling what a DOJ fishing expedition might turn up.
Comments
Once again, the Obama campaign did a lot of tough talk during the campaign and now find themselves hard pressed to turn those words into (substantive) action.
Might there be some collusion in this area? Sure. Is there likely to be a paper (or e-mail) trail no. Is it likely that some third, smaller, upcoming company is harmed by this in any way? No. In fact I’d say the smaller companies are blessed by the fact that these has-beens are doing all their job-hopping among the majors, dragging them down with their big salaries and small, re-cycled ideas.
There are so many ways that big business present a barrier to competition from smaller ones it could fill and encyclopedia. Instead they go after something nobody cares much about. In fact, any DOJ action in this area is sure to be a benefit to the Googles and Microsofts of this world.
We DO know that the DoJ and other agencies can’t account for millions of dollars they spend each year. How about a scaled back accounting, just for IT expenditures:
(1) Every IT dollar spent on major vendors: IBM, Microsoft, Google, and the major Beltway bandits (they don’t call them that for nothin’).
(2) Publish the minutes (or best approximation) of every meeting DoJ purchasing people had with these vendors on pricing issues, delivery problems, etc., so that we can see exactly how you negotiate with these monopolies on purchases that taxpayers bear the brunt of.
I guarantee you if you can put enough information out there you won’t have to pay anyone to track down problems with your own budget. And pairing back monopoly companies abuse of government spending will go a long way toward pairing back the monopoly power these companies have.
I dare ya.
Posted by Mac Beach at June 3rd, 2009 at 2:43 pm