[Federal Register Volume 61, Number 147 (Tuesday, July 30, 1996)]
[Notices]
[Pages 39666-39667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19282]


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DEPARTMENT OF JUSTICE
Antitrust Division
[Civil Action No. 56-344 (AGS)]


United States District Court; Southern District of New York--
United States of America, Plaintiff, vs. International Business 
Machines Corporation, Defendant

    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''). IBM and the United States of America 
have consented to modify the Final Judgment to establish specific 
sunset periods for all provisions currently in effect, but the parties 
have reserved the right to withdraw their consent for at least 90 days 
after publication of this Notice. Prior to entry of an order modifying 
the Final Judgment, the Court and the parties will consider public 
comments. Any such comments on the proposed termination described in 
this Notice must be filed within 60 days following the publication of 
the last notice required by the Court's Order Directing Publication. 
The Complaint, Final Judgment and proposed modification are further 
described below.
    The Complaint, filed on January 21, 1952, alleged that IBM had 
monopolized, attempted to monopolize and restrained trade in the 
tabulating industry, in violation of Sections 1 and 2 of the Sherman 
Act. The Final Judgment was entered by consent between the United 
States and IBM. 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'' (``computers''). 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 computer 
business. On June 13, 1994, IBM filed its motion to terminate

[[Page 39667]]

the remaining provisions of the Final Judgment.
    The Court, on January 17, 1996, terminated certain sections of the 
Final Judgment in their entirety: (a) Sections V (b) and (c), which 
required IBM to offer to sell at no more than specified prices and to 
hold for a specified period used IBM machines that acquired pursuant to 
trade-ins or as a credit against sums then or thereafter payable to 
IBM; and (b) Section VIII, which specified conditions under which IBM 
could engage in ``service bureau business,'' as defined by Section 
II(k) of the Final Judgment. The Court also terminated all other 
provisions of the Final Judgment as they applied to all IBM computer 
products and services, except as they applied to as the AS/400 and 
System/360 * * * 390 families of products and services.
    On July 2, 1996, the United States and IBM entered into a 
stipulation whereby the parties agreed to establish sunset periods for 
all remaining substantive provisions of the Final Judgment--Sections 
IV, V, VI, VII, IX, and XV--as they apply to the AS/400 and System/360 
* * * 390 families of products and services. Section IV fulfills the 
purpose of the Final Judgment in assuring to current and prospective 
IBM customers an opportunity to purchase machines on terms and 
conditions that are not substantially more advantageous to IBM than the 
terms and conditions for leases of the same machines and requires IBM 
to sell its machines at prices that have a commercially reasonably 
relationship to the lease charges for the same machines. Section V 
restricts IBM's ability to re-acquire previously sold IBM machines. 
Section VI requires 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 and requires 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. Section VII restrains 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 attachment to IBM 
machines. Section IX requires IBM to furnish to owners of IBM machines 
manuals, books of instructions and other documents relating to IBM 
machines that IBM furnishes to its own repair and maintenance employees 
and requires IBM to furnish to purchasers and lessees of IBM machines 
manuals, books of instruction and other documents that pertain to the 
operation and application of such machines. Finally, Section XV enjoins 
IBM from entering into certain agreements to allocate markets or 
restrain imports into the United States or exports out of the United 
States and from conditioning the sale or leases of certain machines 
upon the purchase or lease of any other machine.
    The United States and IBM have agreed to modify the Final Judgment 
to establish specific sunset periods for all provisions currently in 
effect. The parties agreed to terminate Section IV (b)(3) and (c)(7) 
and Section VII(d)(1) immediately upon entry of an Order by the Court. 
With respect to the AS/400 family of products and services, the parties 
have agreed to terminate: (a) Section V(a) immediately upon entry of an 
Order by the Court; (b) Section IV (except Section IV(c)(3) as it may 
apply to the provision of operating systems, an interpretation that the 
United States holds and with which IBM does not agree) and Section 
VI(a) 6 months after entry of an Order by the Court; (b) Section IV 
(except Section IV(c)(3) as it may apply to the provision of operating 
systems, an interpretation that the United States holds and with which 
IBM does not agree) and Section VI(a) 6 months after entry of an Order 
by the Court and  all other provisions of the Final Judgment 
as they apply to the AS/400, including Section IV(c)(3) as it may apply 
to operating systems, on July 2, 2000. With respect to the System 360 * 
* * 390 and the remainder of the Final Judgment, the parties have 
agreed to terminate all remaining provisions on July 2, 2001. Thus, 
under the agreement between the United States and IBM, as of July 2, 
2001, the Final Judgment will be terminated in its entirety.
    The United States has filed with the Court a memorandum setting 
forth its position with respect to modifying the Final Judgment as it 
applies to the AS/400 and System/360 * * * 390. Copies of the 
Complaint, the Final Judgment, the Stipulation containing the parties' 
tentative consent, the memoranda and all other papers filed in 
connection with this motion are available for inspect 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 (Telephone 
212-474-1058); and (b) counsel for the United States, N. Scott Sacks, 
Assistant Chief, Computers & Finance Section, Antitrust Division, 
United States Department of Justice, Suite 9500, 600 E. Street, NW., 
Washington, DC 20530 (Telephone 202-307-6132).
Constance K. Robinson,
Director of Operations.
[FR Doc. 96-19282 Filed 7-29-96; 8:45 am]
BILLING CODE 4410-01-M