Tech Firms Settle DoJ Antitrust Action
The federal Department of Justice announced Friday it has settled with six major technology companies that were the targets of a probe into anti-poaching agreements designed to avoid costly bidding wars for star employees.
The six companies settling the case are Google, Apple, Intel, Adobe Systems, Intuit and Walt Disney's Pixar Animation Studios.
From the Associated Press:
The Justice Department had been investigating whether the companies pledged not to use "cold calls" to recruit each other's employees, as part of partnership agreements. The government was concerned that such promises amounted to a form of collusion to avoid bidding wars for employees with specialized skills, and in turn hold down payroll expenses.
These agreements, the Justice Department said, "eliminated a significant form of competition to attract highly skilled employees," depriving employees of access to better job opportunities.
The settlement, of course, has no teeth. It supposedly prohibits them from coming to "no-solicitation agreements" regarding their employees for the next five years. So that means they really, really won't do it. They promise (wink, wink).
Further, as part of the deal, none of the companies had to admit wrongdoing or pay any fines. This despite the Justice Department claiming it had evidence of specific agreements between Apple and Google and between Intel, Intuit and Google. But, you know, that's just the nature of plea deals.
I continue to believe that the Justice Department declined to proceed with the case for two reasons: 1) Not only would they have to prove the existence of these agreements (which, it seems, they could have), but they'd have to prove that employees of the companies suffered significantly (which admittedly would have been challenging), and 2) The Obama Administration is desperate not to appear anti-business in the days leading up to the midterm elections.
Neither is a valid reason, in my opinion. The job of the Justice Department is to investigate and, if necessary, prosecute wrongdoing. Decisions shouldn't be based on how hard a case would be to win; it should be on whether they think they have a case. Clearly they thought they had a case with these companies. If they didn't think so, they would have stopped investigating these firms some time ago, as they did earlier with IBM, Microsoft and Yahoo.
The second reason, political expediency, sucks even more, and speaks volumes about our political system, or maybe just this administration.
But these are just my theories. I can't prove any of it, so I guess we'll have to reach a settlement.
Either way, this is an incontrovertible win for these technology companies. For their employees, not so much.