01
June
2009
|
03:01 PM
America/Los_Angeles

DOJ Probes Hiring Pact Among Top Tech Firms: GOOG, APPL, YHOO...

The Deal Pipeline reports that the Department of Justice is investigating a possible pact between top US tech companies not to poach each other's top executives. If true, it would be a violation of the 1890 Sherman Anti-Trust Act.

Cecile Kohrs Lindell, reports :


According to Washington antitrust lawyers, the Department of Justice antitrust division's networks and technology section, led by chief James Tierney, has sent letters to at least a dozen major computer hardware and software companies. Google Inc., Yahoo! Inc. and Apple Inc. are believed to be among the recipients, as is at least biotechnology firm, Genetech Inc.


. . .The letters suggest that antitrust division lawyers suspect that some of the targeted companies have agreed not to poach each others' employees. Such an agreement, if DOJ lawyers can prove it exists, could be a violation of the nation's oldest antitrust law, the Sherman Act of 1890, which prohibits agreements among competitors that result in restraint of trade.


Foremski's Take:

The DOJ, under the new leadership of Assistant Attorney General Christine Varney, seems to be determined to find some type of anti-trust behavior by top US tech firms, especially Google. But this investigation seems to be clutching at straws. Even if true, it would probably not result in a criminal prosecution. The Deal Pipeline reports that the letters are in the form of a Civil Investigative Demand.

Critics of large companies such as Google are quick to accuse it of violating anti-trust because of its dominance in online advertising markets and its role on the Internet. However, there is no law against success. Anti-trust laws are designed to prevent criminal business activities.


UPDATE: Two days behind: The Washington Post reports "Federal Antitrust Probe Targets Tech Giants, Sources Say"