US Department of Justice orders Apple to end anticompetitive deals

Posted:
in General Discussion edited January 2014
Apple 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.
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Comments

  • Reply 1 of 27
    OMG!

    Short AAPL¡



    This will affect Apple's bottom line by 0.000001%.

    (For you nerds out there (I resemble that condition), please don't take the 10**-7 exactly. However, if you want to calculate the exact impact on Apple as opposed to my semi-random number (for hype purposes), then be my guest.
  • Reply 2 of 27
    Quote:
    Originally Posted by davebarnes View Post


    OMG!

    Short AAPL¡



    This will affect Apple's bottom line by 0.000001%.

    (For you nerds out there (I resemble that condition), please don't take the 10**-7 exactly. However, if you want to calculate the exact impact on Apple as opposed to my semi-random number (for hype purposes), then be my guest.



    that bubble will burst as soon as s. jobs is gone.
  • Reply 3 of 27
    Good for the Justice Department. It tilts the balance of power towards the employees, however slightly.



    I am surprised there weren't many more companies.
  • Reply 4 of 27
    Quote:
    Originally Posted by Loptimist View Post


    that bubble will burst as soon as s. jobs is gone.



    What 'bubble'? Can you elaborate? Or, are you just throwing words around.....
  • Reply 5 of 27
    Will such collusion somehow not be immoral (and illegal) in the year 2015?!? So why on earth does the agreement expire in 5 years?
  • Reply 6 of 27
    Quote:
    Originally Posted by anantksundaram View Post


    Good for the Justice Department. It tilts the balance of power towards the employees, however slightly.



    What? This has nothing to do with labor rights, which are just fine, by the way.
  • Reply 7 of 27
    . Nothing new, and nothing will change.
  • Reply 8 of 27
    Quote:
    Originally Posted by anantksundaram View Post


    What 'bubble'? Can you elaborate? Or, are you just throwing words around.....



    He's of the belief that Apple's stock price will lose 200 dollars or more overnight when Steve Jobs dies.
  • Reply 9 of 27
    MacProMacPro Posts: 18,306member
    The aforementioned companies simply need good non compete contracts for all staff of importance to replace this agreement they had. I don't see this changing anything.
  • Reply 10 of 27
    Quote:
    Originally Posted by desides View Post


    What? This has nothing to do with labor rights, which are just fine, by the way.



    The AI article notes: "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."



    Perhaps you are having trouble processing the language?
  • Reply 11 of 27
    Quote:
    Originally Posted by digitalclips View Post


    The aforementioned companies simply need good non compete contracts for all staff of importance to replace this agreement they had. I don't see this changing anything.



    From what I hear - I am not a lawyer - such non-compete agreements are tough to enforce, especially in states like California.
  • Reply 12 of 27
    Quote:
    Originally Posted by Tallest Skil View Post


    He's of the belief that Apple's stock price will lose 200 dollars or more overnight when Steve Jobs dies.



    Just look back at when Jobs went on medical leave......major drop in price. I would not be surprised at all if it happens again, I actually will expect it.
  • Reply 13 of 27
    Quote:
    Originally Posted by anantksundaram View Post


    From what I hear - I am not a lawyer - such non-compete agreements are tough to enforce, especially in states like California.



    They are very common here in California and are enforced often......
  • Reply 14 of 27
    Quote:
    Originally Posted by ZBack View Post


    They are very common here in California and are enforced often......



    You really have no idea what you're talking about do you?



    Non-compete clauses are ILLEGAL in California. It is specifically prohibited, except for specific situations which don't really apply to normal employees.



    The only way to have a good chance of enforcing it would be if they handed a sizeable severance in a SEPARATE contract when the employee leaves the company.
  • Reply 15 of 27
    Quote:
    Originally Posted by ZBack View Post


    Just look back at when Jobs went on medical leave......major drop in price. I would not be surprised at all if it happens again, I actually will expect it.



    Wasn't that also at the same time as a world recession?



    I would expect the effect of jobs leaving to just make the price stay flat rather than drop. Then start altering again after a year based on how well they performed.



    On the other hand though I understand that apple dont pay dividends which means all the current shareholders haven't actually made any money yet and are just waiting for the right time to sell. If jobs left that could be enough of a reason for many to sell, which would lower the price, which could then make more people think the lack of Steve would have an impact and cause them to sell, creating a downwards spiral of apples share price.
  • Reply 16 of 27
    Quote:
    Originally Posted by AppleInsider View Post


    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.







    Nice going Google; abandoning the policy, therefore breaking the contract. Also the timing couldn't be more illuminating.
  • Reply 17 of 27
    And Apple stock price is now close to or at a new historical high...
  • Reply 18 of 27
    Quote:
    Originally Posted by shard View Post


    And Apple stock price is now close to or at a new historical high...



    It already passed the record high. 283 was the record. We're nearly ten dollars above that.
  • Reply 19 of 27
    Quote:
    Originally Posted by AppleInsider View Post


    The DOJ argued that the "no poaching" agreements resulted in collusion, which depressed wages.



    A 6+ figure salary isn't enough?



    Glad we have the DOJ sticking up for the little guy.
  • Reply 20 of 27
    Quote:
    Originally Posted by Loptimist View Post


    that bubble will burst as soon as s. jobs is gone.



    Couldn't happen fast enough. Then maybe we can see decent i3-7 workstations not all consumer crap that ties your hnds to do pro work. USB 3 is out but as normal not for Apple. No dvr in atv, no br anywhere and no express slots hardly anywhere. Can't wait for him and his rainbow attitude ala pill paranoid state if mind to be gone. Ives is the man anyway. But spare me the words like magical when things wint play movie files unless purchased from igoons.
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