Justice Department investigating hiring practices of Apple, others

[AppleInsider]

The United States Justice Department has begun a review of the hiring practices of a number of Silicon Valley technology companies, including Apple, Yahoo, Google, and Genetech for possible anti-trust law violations.

No details have been released by the Justice Department on the exact nature of the investigation. However, the Washington Post reports that the focus of the review seems to be on any agreements that may have been made between the companies to avoid recruiting employees from each other in a bid to maintain their market power unfairly. Such arrangements would stifle competition, violating anti-trust laws.

A similar report published by the New York Times cites "people with knowledge of the inquiry " as adding a few more details, mainly that Justice Department "has issued civil investigative demands, or formal requests for documents and information, to some of the companies involved."

Apple has recently become all too familiar with this type attention from the federal government. Just last month, the Federal Trade Commission started an inquiry to evaluate the ties between its boards of directors and that of Google's, which share two common Directors.

Google’s CEO, Eric Schmidt, serves as a Director on Apple’s Board. The former CEO of Genentech, Arthur Levinson, serves as a Director on the Boards of both companies. This relationship between the two companies could be a violation of Section 8 of the Clayton Antitrust Act of 1914, according to regulators.

The Justice Department's inquiry into the hiring practices of some of Silicon Valley’s biggest names is the latest move by the Obama administration to sniff out anti-competitive behavior in the technology sector, where the highly competitive, high-stakes market for top talent has seen some companies sue their rivals for poaching employees.

[ View this article at AppleInsider.com ]

[ulfoaf]

I have heard of agreements like this before. There was one similar between the main oil field services companies. It seemed to fall apart, I don't know if through legal action.

[ripadgett]

Originally Posted by AppleInsider

The United States Justice Department has begun a review of the hiring practices of a number of Silicon Valley technology companies, including Apple, Yahoo, Google, and Genetech for possible anti-trust law violations.

[ View this article at AppleInsider.com ]

Watch out Silicon Valley and especially you Apple. You're favorite son's henchmen are coming for you. First the banking industry, then the Insurance industry, then the automobile industry now Silicon Valley and the Tech industry, who's next?

Is this the HOPE and Change you were expecting? Careful what you ask for, you just might get it.

Rodger

[teckstud]

I will pre-empt the fanboys and state that this is a flat out attempt by Microsoft and its lobbyists' influence to prove that Apple, Yahoo, Google and Genetech and others are conspiring to put them out of business.
Microsoft is behind all the evil in the world.

[Quadra 610]

Old news.

At least it has little to do with the tech that Apple is rolling out. That sense of "anti-competitive" behaviour has been thrown out a while ago by Judge Alsop and others. It's no longer an issue, really.

I still visit Windows-therapy sites like Neowin (where Stockholm-syndrome sufferers gather) and every time there is mention of greater government or EU oversight into MS' practices (namely, IE), I see these unfortunates whining and demanding that the EU and the US investigate Apple, regarding their ownership of OS X and inclusion of Safari. It's great for a laugh. Sometimes galactic ignorance provides plenty of comic relief.

[merdhead]

Originally Posted by ripadgett

Watch out Silicon Valley and especially you Apple. You're favorite son's henchmen are coming for you. First the banking industry, then the Insurance industry, then the automobile industry now Silicon Valley and the Tech industry, who's next?

Is this the HOPE and Change you were expecting? Careful what you ask for, you just might get it.

Rodger

Uh, what are you talking about? The first three industries basically bankrupted themselves in a fit of greed, and the government saved them from themselves, and you blame the government? Then you mention the tech industry, which is completely unrelated. And, by the way, the idea of anti-trust legislation is so that companies don't ruin industries, unless you think Microsoft pushing everyone around was the tech industry's golden age.

[teckstud]

Originally Posted by merdhead

Uh, what are you talking about? The first three industries basically bankrupted themselves in a fit of greed, and the government saved them from themselves, and you blame the government? Then you mention the tech industry, which is completely unrelated. And, by the way, the idea of anti-trust legislation is so that companies don't ruin industries, unless you think Microsoft pushing everyone around was the tech industry's golden age.

Here we go- drag Microsoft (not even mentioned in the thread) into it. So typical of the discussions around here.

[crees!]

Originally Posted by merdhead

Uh, what are you talking about? The first three industries basically bankrupted themselves in a fit of greed, and the government saved them from themselves, and you blame the government?

When you have all the facts the conclusion is government intervened and was the basis for this mess in the first place.

[Quadra 610]

Originally Posted by teckstud

Here we go- drag Microsoft into it. So typical of the discussions around here.

It's easy. Microsoft is synonymous with corporate wrongdoing and anticompetitive practices. They were actually convicted, if you recall.

[Mister Snitch]

Yeah, I don't believe my own headline, either. The economy's going to hell, and this is what's being done about it. Hey, let's make the strongest segment of the nation's economy spin its wheels for awhile, just because we can.

[lamewing]

Originally Posted by Quadra 610

It's easy. Microsoft is synonymous with corporate wrongdoing and anticompetitive practices. They were actually convicted, if you recall.

It may be easy (easy to blame others you don't like) to include MS in this discussion, but this has nothing to do with them. Sorry fanboys. Sometimes Apple (and others) can screw the pooch on their own just fine.

[Quadra 610]

Originally Posted by Mister Snitch

Yeah, I don't believe my own headline, either. The economy's going to hell, and this is what's being done about it. Hey, let's make the strongest segment of the nation's economy spin its wheels for awhile, just because we can.

I agree that it seems like a silly thing to do.

And in related news, the Obama gov't just bought you GM, to the tune of about $30 billion.

[GCS]

Originally Posted by merdhead

Uh, what are you talking about? The first three industries basically bankrupted themselves in a fit of greed, and the government saved them from themselves, and you blame the government? Then you mention the tech industry, which is completely unrelated. And, by the way, the idea of anti-trust legislation is so that companies don't ruin industries, unless you think Microsoft pushing everyone around was the tech industry's golden age.

It's all about Regulation - the Democrat Congress made the regulations which began the process - so it is about government. The industries mentioned had to do what they did by law/regulation or face devestating Federal penelties and possible imprisonment.

With the Assention of the Messiah, it has become less about Regulation and more about absolute government control of business (this is the definition of fascism). {When you get a direct call from the POTUS assuring you that your headquaters will not be moved - rest assured He is your owner/boss} With the government owning the sectors previousy mentioned, the next target becomes tech. From tech they will move on to other areas to control.

Apple et al are just entities on the list. This review is just the beginning. Remember, by law the Messiah now has - should he care to use it - absolute conrol over the internet.

[Maestro64]

Folks, if I read it correctly, it appears they are claiming that those listed companies have agree not to hire each other employee.

First not sure how Genetech fits to the list.

Next, not sure how this is anti-competitive behavior, I can see why employees would not like this since it make it hard for them to move companies if they want to.

So what if a couple companies agree not to try and recruit employee's away from each other. I am having a hard time trying to see how this harms one company over another or how the consumer is hurt by this behavior.

Grant it, I worked for a company back in 1999 that park a tour bus outside competitor companies with recruiters in it and a big sign on the outside saying "HIRING COME ON IN"

I can see how they could be wrong...

[malax]

It's anti-competitive in the labor market, not the end-product market. In this case it, allegedly, harms the employees by restricting their ability to command a fair-market wage. Worth looking into, and preventing if true.

[anantksundaram]

Originally Posted by crees!

When you have all the facts the conclusion is government intervened and was the basis for this mess in the first place.

How did the government intervene in the creation and marketing of credit default swaps? Or Bernie Madoff?

Would we, arguably, have been better off if the government actually had intervened, before they became the problems they did?

[anantksundaram]

How are they going to distinguish "...agreements that may have been made between the companies to avoid recruiting employees from each other in a bid to maintain their market power unfairly" from simple corporate secrecy/intellectual property protection issues?

I think this is a waste of taxpayer money.

[anantksundaram]

Originally Posted by malax

It's anti-competitive in the labor market, not the end-product market. In this case it, allegedly, harms the employees by restricting their ability to command a fair-market wage. Worth looking into, and preventing if true.

Yet, this is an industry that is among the highest-paying in the country, one that is constantly complaining about not being able to find enough home-grown talent (witness all the H1Bs and US-trained foreign students working in this industry), and one whose employment continues to grow.

How can all that be the case if what you and DoJ are saying is true?

[anantksundaram]

Originally Posted by GCS

{When you get a direct call from the POTUS assuring you that your headquaters will not be moved - rest assured He is your owner/boss} ......

Ah, someone has been reading the op-ed pages of the Wall Street Journal, I see.....

[al_bundy]

Originally Posted by anantksundaram

How are they going to distinguish "...agreements that may have been made between the companies to avoid recruiting employees from each other in a bid to maintain their market power unfairly" from simple corporate secrecy/intellectual property protection issues?

I think this is a waste of taxpayer money.

1. issue subpeonas
2. go to companies and request a few years of emails
3. go through the emails and other documents they get

[jragosta]

Originally Posted by ulfoaf

I have heard of agreements like this before. There was one similar between the main oil field services companies. It seemed to fall apart, I don't know if through legal action.

It fell apart because the government put a stop to it.

Like most employment issues, it can be complicated and the devil is in the details. However, on the surface, an agreement to not hire each others' employees would be illegal for major market players. If that is what they've done, they should be prosecuted (and fire their attorneys for letting them do it).

However, there are circumstances where it is legal, depending on the structure of the agreement, so it's impossible to say for sure without the details.

[Dr Millmoss]

Originally Posted by Mister Snitch

Yeah, I don't believe my own headline, either. The economy's going to hell, and this is what's being done about it. Hey, let's make the strongest segment of the nation's economy spin its wheels for awhile, just because we can.

Collusion -- it's good for the economy!

[Chris_CA]

First Apple gets sued for hiring someone (Papermaster) from another company, now they are in trouble for not hiring someone from another company???

[Slang4Art]

Obama is on a fine little rampage. Glad I didn't vote for that villain.

[jragosta]

Originally Posted by Maestro64

Folks, if I read it correctly, it appears they are claiming that those listed companies have agree not to hire each other employee.

First not sure how Genetech fits to the list.

Next, not sure how this is anti-competitive behavior

If true, it is anticompetitive in several ways:

1. It restricts the employee's ability to obtain the best employment.
2. It restricts the ability of a smaller company to develop new products if they can not hire the best people they can find.
3. It effectively partitions the market - and makes it hard for any company to enter existing markets - since they would be unable to hire at least some of the people they need to do so.

[jragosta]

Originally Posted by Chris_CA

First Apple gets sued for hiring someone (Papermaster) from another company, now they are in trouble for not hiring someone from another company???

Neither statement is correct.

Apple didn't get in trouble for hiring Papermaster. Papermaster got in trouble and Apple was prevented from using him in areas where his knowledge of trade secrets could hurt IBM. Well established legal principles.

Apple is not in trouble for not hiring anyone. They're being investigated because of allegations that they had a PRIOR AGREEMENT not to hire people from specific companies. Simply not hiring someone is perfectly within their rights (as long as they aren't refusing to hire someone for illegal reasons like age or sex discrimination).

[solipsism]

Originally Posted by teckstud

Here we go- drag Microsoft (not even mentioned in the thread) into it. So typical of the discussions around here.

He mentions MS in post 6, you mention MS in post 4, but you begrudge him for dragging MS into the thread. Your different personalities really should collaborate more.

[Virgil-TB2]

Originally Posted by AppleInsider

... the focus of the review seems to be on any agreements that may have been made between the companies to avoid recruiting employees from each other in a bid to maintain their market power unfairly. Such arrangements would stifle competition, violating anti-trust laws.

How hilarious is it that they are interested in investigating this minor collusion that does no one any harm yet are not even remotely interested in investigating the music and media cartels?

Isn't the fact that all the media companies collude with each other over contracts and pricing and purposely give selective good pricing to their friends (Amazon) and higher pricing to their "enemies" (Apple), more important?

Absolutely no one is being hurt in the first case, whereas thousands, possibly millions of consumers are being screwed over in the second example.

Go USA?

[Chris_CA]

Originally Posted by jragosta

Neither statement is correct.

Hey, thanks!
It was not meant to be a deep analytical piece.
It was simple comment.

[Virgil-TB2]

Originally Posted by jragosta

If true, it is anticompetitive in several ways:

1. It restricts the employee's ability to obtain the best employment.
2. It restricts the ability of a smaller company to develop new products if they can not hire the best people they can find.
3. It effectively partitions the market - and makes it hard for any company to enter existing markets - since they would be unable to hire at least some of the people they need to do so.

Your points 2 and 3 are not supported by the facts so far. The alleged agreement is only between the companies in question and does not (as described) stop any other company from hiring their employees who is not party to the agreement.

The only real argument here is the first point in that an employee of Google or Apple would be effectively black-balled from working at the other company and may not even know they are. It's also kind of anti-democratic in that employees *have* moved between these companies in the past so it brings up the possibility that you *can* do so if you have agreement from management. That's practically wage servitude and ethically bankrupt even if it's not illegal.

Since the only person who could possibly get a downside form this is the individual employees of the companies in question, and only then through a very specific series of circumstances, it seems silly to even investigate this (IMO) unless there is an actual complaint form an employee. Also, as per my other post, there are other much larger, more obvious and more egregious violations of antitrust to go after before doing this.

[a_greer]

Originally Posted by ripadgett

Watch out Silicon Valley and especially you Apple. You're favorite son's henchmen are coming for you. First the banking industry, then the Insurance industry, then the automobile industry now Silicon Valley and the Tech industry, who's next?

Is this the HOPE and Change you were expecting? Careful what you ask for, you just might get it.

Rodger

This one kinda goes against that MO,

The thing I have been hearing is that "bankers make too much money, they shouldn't make more than like $250K" or whatever their bullshit salary of the week is now.

Now the collusion charges here keep salaries low, if the Valley Powers arent competing for the best minds in science and tech then those professional salaries, often running into the mid 6 figures, artificiality lower than "market value" so if Obama and Co "hated the rich" they would let this one slide, the "rich" software and science guys making over $250k are being artificially held back.

Plus, this could be bad for the balance sheets of the companies whos execs heavily contributed to Obama and Co...so it seems to me that this is just a case of Obama standing up for the little guy who really was being screwed in the market.

As a free market capitalist who doesn't like most of what obama has done, I must say, he is kinda right here.

It pisses me off that do-nothing MBAs make millions to figure out how to fuck over the guys making the goodies that bring in the money.

also, IANAL, but I must wonder if a practice carried out by most places I have worked is legally enforceable: they make you agree to not tell anyone who works there what your salary is or what percentage raises and / or pay cuts you get...so the guy newxt to me doing the same job could be making far more or less than me, but we shall never know...

[addabox]

No details have been released by the Justice Department on the exact nature of the investigation.

Right? So what in the world is everyone on about? How in the world can anyone be getting indignant as to what kind of massive, illicit intrusion into the private sphere this represents without knowing anything about the particulars?

I mean, the ditto-heads I get, they're just stupid. But for the relatively sane folks, hold your horses.

[tenguy]

Originally Posted by ripadgett

Watch out Silicon Valley and especially you Apple. You're favorite son's henchmen are coming for you. First the banking industry, then the Insurance industry, then the automobile industry now Silicon Valley and the Tech industry, who's next?

Is this the HOPE and Change you were expecting? Careful what you ask for, you just might get it.

Rodger

Ain't that the truth? I love Apple but it is very disappointing to see the very public political stances the Board & officers of the company take. Problem is ALL of us are going to get change.

[GQB]

Originally Posted by crees!

When you have all the facts the conclusion is government intervened and was the basis for this mess in the first place.

Thanks! I needed a great laugh to start off my day.
30 years of deregulation (including repeal yes, under corporate Clinton) of banking regulations that keep this kind of mess at bay since WWII, and its the fault of REGULATION?

Hilarious. But I guess the right will go down swinging.

[Dr Millmoss]

Originally Posted by addabox

Right? So what in the world is everyone on about? How in the world can anyone be getting indignant as to what kind of massive, illicit intrusion into the private sphere this represents without knowing anything about the particulars?

We don't need any stinking particulars.

Executives from these companies are about to be clapped in irons, to be frog-walked in orange jumpsuits before the cameras of CNN.

[schmidm77]

lol, firms are the COMSUMERS of labor. how would any agreement to not actively recruit employees of other companies be"anti-competitive"? If anything, the collusion of labor in unions hurts competition in the labor market much more than this possibly could - yet nobody objects to that, do they?

[aga]

Originally Posted by jragosta

If true, it is anticompetitive in several ways:

1. It restricts the employee's ability to obtain the best employment.
2. It restricts the ability of a smaller company to develop new products if they can not hire the best people they can find.
3. It effectively partitions the market - and makes it hard for any company to enter existing markets - since they would be unable to hire at least some of the people they need to do so.

1. Apple has/had an agreement like this in place for their Sales Consultants. It does pose issue to ones ability to move from company to company, but it also keeps one company from cherry picking employees from another company when they have favorable access.

2. may be true, but did not get that from the article.

3. technically, you only need to hire 2% to 10% of the workforce to own market. That number is High, as you can get by very well with the right 0.04% of the people. That said, you only need to train a few people to compete with those you can not hire. Really a non issue.

Issue is with the employee being able to move jobs and companies if they want to, and this is no different than all of the laws you are told you must abide by that are illogical, do not make sense, and are not reciprocating. (seatbelt, driving while distracted, taxes, ...) Not sure I really see the Justice Departments point, when they in essence are doing the same. Guess they keep smoking the wild weed even while it's illegal .

Or, this is what happens when Apple spends too much of its time and resources fighting causes they should not be in the middle of, bringing bad karma back to them.

There's always open source for your next operating system.

[addabox]

Originally Posted by Dr Millmoss

We don't need any stinking particulars.

Executives from these companies are about to be clapped in irons, to be frog-walked in orange jumpsuits before the cameras of CNN.

While Hitler Obama just laughs and laughs.......

[GCS]

Originally Posted by anantksundaram

Ah, someone has been reading the op-ed pages of the Wall Street Journal, I see.....

Actually I haven't read any part of any newspaper in decades...


Common sense is all - just look at what's happening and draw conculsions about were the future will land.

PS: 6 months from now will be really rough or you ain't seen notten yet...

[ulfoaf]

Originally Posted by jragosta

If true, it is anticompetitive in several ways:

1. It restricts the employee's ability to obtain the best employment.
2. It restricts the ability of a smaller company to develop new products if they can not hire the best people they can find.
3. It effectively partitions the market - and makes it hard for any company to enter existing markets - since they would be unable to hire at least some of the people they need to do so.

I'll bet this is a kind of "gentlemen's agreement." If they REALLY wanted someone they would probably break it. I've heard of agreements where a person was not able to work on the same type of products he worked on at the competitor for a time period, like 12 months. They don't want to "trade" employees constantly. This isn't necessarily good for the employee. I am sure there is no legally binding contract saying they cannot hire each other's employees.

It wouldn't prevent a startup company from hiring all the best people they can get - they aren't part of the agreement!