[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