JUSTICE DEPARTMENT URGES MAJOR RESTRUCTURING OF IBM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01092A000100060023-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 12, 2016
• Document Release Date: June 7, 2002
• Sequence Number: 23
• Publication Date: November 7, 1974
• Content Type: NSPR

Approved For Release 2002/08/06 CIA-RDP78-01092A000100060023-
A 4 Tlw,day, Nov. 7,1974 THE WASHINGTON POST
Justice Department Urges Major
IBM, From Al
matched power, ; the depart-
ment said.
A 1970 General Electric doc-
ument cited in the department
brief said, "If our studies have
any validity, they suggest that
no one dwarf can make more
than a temporary, highly se-
lective impact in this industry.
In the absence of now unanti-
cipated severe constraints on
IBM, any competitor over j IBM's Aoiver. "Tor attack IBM
time will exist at the tolerance
of this dominant company."
In 1970, when General Elgc-,
tric quit the computer field by
selling out to Honeywell, "GE
had lost between $125 and
$150 million from its computer-
operations," the department
said.
RCA internal documents
head-on amounts to attaglgng
a well-led army with a -corn-
mando''company in an open
field," an RCA executive'said
in a.memo in.July, 1971.
In December, 1970, RCA
general counsel Robert Wer-
ner cpmpd to his counter
part at IBM, Nicholas deB.
Katzenbae,the farmer'Attor-
also reveal concern about'ney General, that IBM's an-
Justice Urges
Break-Up
Of IBM
By Morton Mintz
Washington post Staff Writer
The Justice Department
said yesterday that only a ma-
jor restructuring of IBM will
break its "monopoly power"
and bring true competition to
the multibillion-dollar com-
puter industry.
The company said the de-
partment was presenting
only its side."
The government urged the
break-up of IBM in a 33-page
pretrial brief filed with U.S.
(District Court Chief Judge
IDavid N. Edelstein in New
'York City.
The IBM case promises to be
the biggest anti-monopoly trial',,
in the 84-year history of the'
Sherman Antitrust Act. The
proceeding will take place
after almost six years of legal
skirmishing.
According to the Antitrust
Division brief, the trial "can
be expected to be a long one
... in part because IBM's
power base in the relevant!
Restructuring of IBM
nouncement and pricing for petitive action by a,dtlminant
,lts 370/1 was an ap, company
parent at mpt ? to .forestalI' Katzenbach denied the
competition from the RCA 6. I charge and, the department
Katzenba th repliedthat thejacknowledged, "There Is some
charge puzzled him and Wer-I support for the view that the
ner said that probably arose
"from a failure to distinguish
between *nest' competition
. and 'discriminatory'com-
pricing and announcement of
the 370'/145 was not aimed at
RCA. What is significant, how-
ever, is that RCA's chief legal
officer reached the conclusion'( By computing the company's I
that IBM was a monopolist market share on, the basis of"
acting in violation of the anti- "lease only" business, IBM was
trust laws to handicap RCA." 'able to tell the Justice Depart-~l
The department used IBM's ment in early 1969 that its,
own documents to show that share of installed systems was l
the company's attorneys and ,
top management "recognized only 48.7 per cent, the depart-
that IBM's own figures on ment said. Several months
monopoly shares evidenced later, the share as measured byll
-'IBM's monopoly position and the old statistical method was
that these admissions had to shown to be 71.2 per cent, the
be stopped." department said.
G u it dsnwn Describe
Approved For Release 2002/08/06 : CIA-RDP78-01092A000100060023-9