Friday, September 24, 2010, 05:20 pm PT (08:20 pm ET)
US Department of Justice orders Apple to end anticompetitive dealsApple and five other major Silicon Valley companies have settled with the U.S. Department of Justice after an investigation into agreements made between competitors to prevent the poaching of each other's workers.
The settlement was filed late Friday and names Apple, Adobe, Google, Intel, Intuit, and Pixar. The terms of the settlement ban companies from making "no solicitation agreements" in recruiting for five years.
"The proposed settlement more broadly prohibits the companies from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees. The companies will also implement compliance measures tailored to these practices," the Department of Justice announced in a statement.
The DOJ argued that the "no poaching" agreements resulted in collusion, which depressed wages. The often informal agreements "eliminated a significant form of competition to attract highly skilled employees."
At issue are partnership agreements where companies agreed not to "cold call" or make unsolicited job offers to each other's employees. An agreement between Apple and Google was uncovered last year by TechCrunch. According to the DOJ, Apple and Google entered the agreements "no later than 2006."
The Department of Justice took issue with the breadth of some of these agreements. "They were broader than reasonably necessary for any collaboration between the companies," the department said.
Statements obtained by The Associated Press from some of the named companies claim that no harm was done.
"Intuit general counsel Laura Fennell said in a statement that the company does not believe it did anything wrong," the AP noted.
"Intel does not believe its actions violated the law, nor does the company agree with the allegations. The company is settling the matter because it believes it would not harm the company or its ability to do business," Intel spokesman Chuck Mulloy said.
A statement from Adobe asserted that the company had followed applicable antitrust laws and had settled to avoid the "costs and distraction" of litigation.
Apple and Pixar did not respond to the AP's requests for comments.
Amy Lambert, Associate General Counsel for Google, posted on Google's official Public Policy blog that "there's no evidence that [Google's] policy hindered hiring or affected wages." While the no "cold call" agreements were in place, Google still hired "hundred of employees" from partner companies. Google abandoned the policy in 2009 after the Justice Department began its investigation, Lambert said.
The Wall Street Journal previously reported that the technology companies were in "the final stages of negotiations" with the DOJ.
On Topic: General
- Apple CEO Tim Cook says privacy talks with Chinese government were 'very open'
- Former Apple exec Ron Johnson wants to make online shopping personal with new startup 'Enjoy'
- Apple says its 'ambitious' sapphire manufacturing process is 'not ready for production'
- GT Advanced to exit sapphire production business, Apple to recover $439M prepayment over 4 years
- Christian Bale confirmed to play Steve Jobs in upcoming biopic, to start shooting soon