DOJ Requires Changes to E-voting Acquisition

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The U.S. Department of Justice will require Election Systems & Software (ES&S) to sell off some voting equipment systems it purchased as part of its September acquisition of Premier Election Solutions in order to preserve competition among voting systems in the U.S., the agency announced Monday.

ES&S, a large vendor of electronic voting systems, will have to sell off the means to produce all versions of Premier's hardware, software and firmware used to record, tabulate, transmit or report votes, including the Assure 1.2 system, the DOJ said. Without the divestitures, purchasers of electronic voting systems in the U.S. would see higher prices, lower quality and reduced innovation, the agency said.

The DOJ's Antitrust Division, along with nine state attorneys general, filed a civil lawsuit Monday in U.S. District Court for the District of Columbia. The agency also filed a proposed settlement that would resolve its antitrust concerns.

"The proposed settlement will restore competition, provide a greater range of choices and create incentives to provide secure, accurate and reliable voting equipment systems now and in the future," Molly Boast, deputy assistant attorney general for the Antitrust Division, said in a statement.

An ES&S spokeswoman wasn't immediately available for comment.

The acquisition substantially reduced competition because it combined the two largest providers of systems used to tally votes in federal, state and local elections in the U.S., the agency's complaint said. ES&S's acquisition of Premier made ES&S the provider of more than 70 percent of the voting equipment systems in the country.

Under the terms of the settlement, ES&S must divest all of the intellectual property associated with all versions -- past, present and in development -- of the Premier voting equipment systems to another company. ES&S also must divest all Premier tooling and fixed assets, as well as inventory of parts and components.

ES&S must also grant a fully paid-up, irrevocable, perpetual license to use AutoMark, ES&S's ballot marking device for which Premier had a limited license prior to the acquisition. The buyer of the assets will have the right to modify and improve both Premier products and AutoMark, the DOJ said.

The settlement also prohibits ES&S from bidding on new voting-equipment-system contracts using the Premier equipment.

The proposed settlement, if approved by the court, would be in effect for 10 years. Before its acquisition of Premier, the Nebraska-based ES&S was already the largest provider of voting equipment systems in the U.S., with systems installed in at least 41 states and reported revenue of US$149.4 million in 2008.

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