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Google, Yahoo!, Apple Targeted In DoJ Antitrust Probe 166

Posted by Soulskill
from the hand-in-the-cookie-jar dept.
suraj.sun writes with this excerpt from the Washington Post: "The Justice Department has launched an investigation into whether some of the nation's largest technology companies violated antitrust laws by negotiating the recruiting and hiring of one another's employees, according to two sources with knowledge of the review. The review, which is said to be in its preliminary stages, is focused on Google; its competitor Yahoo; Apple; and the biotech firm Genentech, among others, according to the sources, who spoke on condition of anonymity because the investigation is ongoing. The sources said the review includes other tech companies and is 'industry-wide.' By agreeing not to hire away top talent, the companies could be stifling competition and trying to maintain their market power unfairly, antitrust experts said. ... Obama's antitrust chief at the Justice Department, Christine Varney, has said she plans to look at the network effects of high-tech companies and how their grasp on markets has cut out competitors and hurt consumers."
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Google, Yahoo!, Apple Targeted In DoJ Antitrust Probe

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  • Good (Score:2, Insightful)

    From TFA:

    By agreeing not to hire away top talent, the companies could be stifling competition and trying to maintain their market power unfairly, antitrust experts said...In 2005, Microsoft sued Google for hiring away Kai-Fu Lee...

    Good. Hopefully these actions will lead to the outlawing of vaguely wide-ranging NDAs which state that employees may not work for "competitors" for X years after leaving their companies. I wish that TFA provided the list of all the companies because they didn't mention whether or not Microsoft was in the list despite their example above.

    Antitrust experts say that could include wireless carriers and software operators that may be blocking certain applications from running on their networks and devices.

    Let's hope so.

    • Re:Good (Score:5, Informative)

      by harryandthehenderson (1559721) on Wednesday June 03, 2009 @11:08AM (#28196083)

      Hopefully these actions will lead to the outlawing of vaguely wide-ranging NDAs which state that employees may not work for "competitors" for X years after leaving their companies.

      Why would it? That has absolutely nothing to do with what this probe is about. Secondly, such non-compete contracts are already illegal in California which already covers Google, Apple, Yahoo! and Genetech already.

      • Re:Good (Score:5, Insightful)

        by MyLongNickName (822545) on Wednesday June 03, 2009 @11:12AM (#28196147) Journal

        And generally non-competes are ignored in other states as well I applaud California for legislatively declaring them illegal. Companies already operate at an advantage compared to individuals. They should not be able to take away my livelihood when we decide to part ways. If I am employed "at will" by them, then the business arrangement should be symmetrical. If they are willing to offer me a generous severance package, then I imagine they can have a say on where I end up. But even that should be limited.

        • by Maclir (33773)

          "Companies already operate at an advantage compared to individuals"

          Welcome to the United States and its approach to labor relations. See also "right to work" (ie, anti-union) laws.

      • I certainly wouldn't say NDA's have "absolutely nothing to do with" this probe. It's a peripheral issue, in that the corporations dictate terms of conduct, and threaten to punish you if you don't agree to the terms. Being slightly dishonest, I'd agree to the terms up front, then break them if/when I was fired, or whatever. If taken to court, I'd claim that I was coerced into the agreement, therefore it was invalid.

        Corporations have no right to interfere with a working person's ability to earn a living, w

        • I certainly wouldn't say NDA's have "absolutely nothing to do with" this probe.

          We were talking about non-compete clauses not NDAs. Those are two separate things.

  • antitrust, et al. (Score:4, Insightful)

    by megrims (839585) on Wednesday June 03, 2009 @11:06AM (#28196057)

    Why do we trust google, again?

    • by MyLongNickName (822545) on Wednesday June 03, 2009 @11:17AM (#28196237) Journal

      Because they are not Microsoft. And because they are competing successfully against Microsoft. Nothing more.

      Power corrupts. Doesn't matter if the person with power has shit that doesn't stink. By nature, the stronger person will eventually abuse his power. It may not even seem that way to the person with the power, but it will happen. Same is even more true with organizations. They are more complex, less personal. As Google collects more data, as its reach becomes bigger and as time goes on, the abuse will surface. Not that Google is any better or worse than anyone else, it is their success that will do it. And when Google's "Do No Evil" becomes "Well, maybe a little evil", they will make Microsoft look like an amateur.

      (And thank you Slashdot for making me wait five minutes between posts. Excellent Karma, get mod points yet have to wait. And when I use the email link to report the problem, my email gets ignored. Brilliant)

      • Re: (Score:2, Insightful)

        by homer_s (799572)
        Power corrupts. Doesn't matter if the person with power has shit that doesn't stink. By nature, the stronger person will eventually abuse his power.

        Good point. Would you apply this to the political parties as well?
        I mean the democratic party is getting way too powerful - are Obama's Doj people going to look into that as well?
        • by elrous0 (869638) *
          I'm confident that they'll investigate it every bit as thoroughly as the Bush Admin's DoJ investigated the Republican Party's power.
      • by BitZtream (692029)

        It makes me wait 60 seconds, not 5 minutes.

      • by sgt scrub (869860)

        That was the argument to like Microsoft and hate IBM.

      • Power corrupts. Doesn't matter if the person with power has shit that doesn't stink. By nature, the stronger person will eventually abuse his power. It may not even seem that way to the person with the power, but it will happen. Same is even more true with organizations. They are more complex, less personal. As Google collects more data, as its reach becomes bigger and as time goes on, the abuse will surface. Not that Google is any better or worse than anyone else, it is their success that will do it. And when Google's "Do No Evil" becomes "Well, maybe a little evil", they will make Microsoft look like an amateur.

        That's ridiculous. Power doesn't even corrupt at all; it merely attracts the corruptible.

      • Re:antitrust, et al. (Score:4, Interesting)

        by brian0918 (638904) <brian0918NO@SPAMgmail.com> on Wednesday June 03, 2009 @01:12PM (#28197955)
        Way to confound economic power with political power. Corruption, violation of rights and contracts, none of that is possible without a hand in politics, ie, a politician willing to pass/enforce laws that harm others and violate their rights.
        • by Trepidity (597)

          Violation of contracts is more a matter of lack of political power than political power. A large corporation can ignore your contracts at will, unless there is a credible threat of punishment.

          • Re: (Score:3, Insightful)

            by brian0918 (638904)
            The violations I was referring to were for contracts invalidated by new legislation passed by politicians bought by corporations. The law, the politicians, the force-bearing entity is to blame.
      • Power corrupts.
        Absolute power corrupts absolutely.
        And it absolutely rocks to have absolute power.

        (to paraphrase Despair.com which has a cool poster on the topic)

      • Google has two main differences, I think, for now:

        1. They're still largely controlled by some fairly idealistic folks, who are now so filthy rich that they aren't that worried about making even more money, so much as using their multi-billion-dollar playground to incubate things they think of as cool. As long as their playground continues making significant profit margins, the third-party investors will probably let them do this.

        2. In many of their market segments, their self-interest isn't as badly aligned

      • Re: (Score:3, Insightful)

        by Dutchmaan (442553)
        I've always thought it ironic that virtue tends to help in the aquistion of power, and corruption is used to try and maintain it, but is its eventual downfall.
    • Really, how is it a bad thing if Google says to Yahoo, "Hey, we won't try to hire away your employees if you don't try to hire away mine"?

      If anything, that's far less evil than trying to steal anyone they can.

      • by harryandthehenderson (1559721) on Wednesday June 03, 2009 @11:31AM (#28196413)
        Except that Google and Yahoo! will still attempt to recruit away people from other companies they don't have a pact with and as such this appears to be shady collusive behavior.
      • Re: (Score:2, Interesting)

        by haystor (102186)

        If I'm employed by Google and seeking a job at Apple, that agreement is interfering with my negotiations.

        If this is true, they are conducting discussions about employment with each other without the affected parties being represented.

        If it were two companies conspiring against a third company instead of a just a group of anonymous potential employees, the lawsuits would be measured in the billions.

        • If I'm employed by Google and seeking a job at Apple, that agreement is interfering with my negotiations.

          No it's not. That's not what this agreement is about. Nothing in this agreement is about stopping an employee from applying for a job at one of the other companies. The agreement is about the companies not trying to actively recruit away employees of the companies they are colluding with.

          • Re: (Score:2, Informative)

            by chiguy (522222)
            This agreement negatively affects employees because they are not made aware of opportunities for 20% pay raises or other benefits from a large group of major companies. This artificially keeps wages and benefits low for people in the colluding companies.

            The very common scenario would be: someone is quite happy working at Google developing AJAX and is not actively looking to switch jobs but does have their resume on job boards. Yahoo wants to find an AJAX expert and is willing to pay 50% more for the expe
            • This agreement negatively affects employees because they are not made aware of opportunities for 20% pay raises or other benefits from a large group of major companies.

              In what way does this agreement stop an employee from looking at the job opportunities of another company?

              This artificially keeps wages and benefits low for people in the colluding companies.

              No it doesn't.

              The very common scenario would be: someone is quite happy working at Google developing AJAX and is not actively looking to switch jobs but does have their resume on job boards. Yahoo wants to find an AJAX expert and is willing to pay 50% more for the expertise to catch up with Google quickly.

              This doesn't make sense. If you weren't looking for a new job why would you post a resume to a job board?

              Yahoo is unable to contact this expert.

              Through the agreement they themselves set up. If they had really wanted to contact the person then they shouldn't have made this deal.

              This pretty clearly hurts the employee.

              Not necessarily. I'd consider working at Yahoo! to probably be a much worse job than working at Google so I'd

              • I wouldn't vote for a Republican in a million years.

                Not even if the views of the Republican party changed such that they reflected your own views with near-perfect accuracy?

                Never say never. Remember, overall Republican (and Democrat) views have changed numerous times over the last several decades.

                • Not even if the views of the Republican party changed such that they reflected your own views with near-perfect accuracy?

                  Nope.

                  Never say never. Remember, overall Republican (and Democrat) views have changed numerous times over the last several decades.

                  I wouldn't vote for either of those parties or the Libertarians, so it doesn't really matter to me.

                  • So you wouldn't vote for someone that represents your views almost perfectly, simply because they associate themselves with a party?

                    Wow. That's sad.

                    • So you wouldn't vote for someone that represents your views almost perfectly, simply because they associate themselves with a party?

                      Yep, because those political parties are just lackeys of special interests that I have none of my interests at heart.

                      Wow. That's sad.

                      Oh well. I'll try not to lose sleep over it too much.

                    • Yep, because those political parties are just lackeys of special interests that I have none of my interests at heart.

                      You appear to have a very different understanding of the phrase "represents your views" than I do. You see, when I say John represents some particular set of views, I mean he actively works to put those views into action. You appear to mean that John might hold those views himself but ignores them in favor of some special interest or other. If you are correct, John can hardly be said to represent those views, can he?

                      My use of the phrase mirrors closely the meaning of the words, while your apparent unders

            • Yes, the employee could troll the job boards, but why do you want to force the employee to do the work when head hunters are paid to find them? I bet you're a Republican.

              As a Republican who wants companies to find me (rather than finding them myself), I'm very confused by your characterization of Republicans as people who want the employees to do all the work. I've never heard a representative of the Republican Party make that claim, and I've never known a Republican who believes it.

              I'm sure there's some logical fallacy that applies here, but I'm too lazy to look it up. Maybe I can get it to look me up...

      • It's certainly bad for the employees who may not get paid as much as they would if there wasn't such an agreement, because they've removed an entire source of demand. But like someone else said it basically means that when Google or Yahoo need more employees that have experience working in their field they have to get them from other competitors who aren't part of the agreement, therefore the companies in the agreement make each other stronger by strangling the rest of the field.
    • by FooAtWFU (699187)

      What you mean "we", white man?

      (yeah yeah I'm as white as the next guy :P)

  • No-hire pact? (Score:5, Insightful)

    by DoofusOfDeath (636671) on Wednesday June 03, 2009 @11:11AM (#28196137)

    It seems to me like there's another angle on this, from the perspective of the affected employees, not the customers/competitors.

    By forming a pact that keeps an employee at company A from getting a job at any other company in the cartel, doesn't that run afoul of federal fair labor laws?

    • By forming a pact that keeps an employee at company A from getting a job at any other company in the cartel, doesn't that run afoul of federal fair labor laws?

      Where in here did it say they were preventing someone from getting a job at one of the other companies? This is about the companies themselves not actively trying to recruit away current employees of the other companies.

      • by kithrup (778358)

        And Borland's history with uSoft is a perfect example of why such pacts are put into place.

      • Re:No-hire pact? (Score:5, Insightful)

        by rev_sanchez (691443) on Wednesday June 03, 2009 @11:33AM (#28196427)
        Non-compete restrictions in employment contracts are common in software development work and are another flavor of this issue. What these companies have done is more insidious because they aren't asking employees to agree to being locked out of major portions of the job market for their skills.

        The result of this is that you often can't work in the industry for years after leaving your job. To insist that employees have experience when they are hired and then prevent them from using it when they leave seems wrong.
        • Non-compete restrictions in employment contracts are common in software development work and are another flavor of this issue. What these companies have done is more insidious because they aren't asking employees to agree to being locked out of major portions of the job market for their skills.

          Except non-competes are illegal in California which all 4 of the listed companies are based in. Nice try though.

          The result of this is that you often can't work in the industry for years after leaving your job. To insist that employees have experience when they are hired and then prevent them from using it when they leave seems wrong.

          That's great and all but non-compete clauses aren't what this probe is about.

    • by BitZtream (692029)

      Why, because these companies are the only places the employee can work? You realize that every employee at these companies has a comparable job in a field completely unrelated to silicon valley. Contrary to popular belief, Google, MS, and Apple are not the only companies who need network admins, systems engineers, developers and everything else. Technology employees are used in EVERY business, so unless you're saying that every company in America agreed to not hire someone elses employee while they were

      • You do not have a 'right' to work anywhere, regardless of what you think. Working is a privilege, once you wrap your thick skull around that you'll be a lot better off in life.

        You're half-right, the same way "skateboarding is not a crime" is half-right.

        You don't have an absolute right to work wherever you like, but you do have the right to be free from certain kinds of interference by third parties, regardless of which job you're seeking.

  • by R2.0 (532027) on Wednesday June 03, 2009 @11:22AM (#28196315)

    "Obama's antitrust chief at the Justice Department, Christine Varney, has said she plans to look at the network effects of high-tech companies and how their grasp on markets has cut out competitors and hurt consumers."

    They are investigating collusion in the labor market - in this case, the companies themselves are the consumer, and job seekers provide the service. But this has nothing to do with cutting out competitors and hurting consumers. What they are doing is collusion in a market which, though probably illegal, keeps costs down, not up.

    "look at the network effects of high-tech companies and ... grasp on markets ..." is shorthand for increased government regulation, whether warranted or not. What will happen when they decide to investigate the companies that supply toilets, and find out that "only" 10 companies "dominate" the market? They may not be colluding, but OBVIOUSLY such a small number of companies id bad for the market, and hence requires regulation of their pricing to protect the consumer.

    • by homer_s (799572)
      Will they also look at the collusion in the political market where only 2 firms 'dominate' and worse, the firm that has the dominant position is actively doing things to keep the other firm out?
    • by tnk1 (899206)

      What they are doing is collusion in a market which, though probably illegal, keeps costs down, not up.

      Are you sure about this? If you think about it, its probably not true except at the most superficial level.

      Consider that while it is true that they don't get into bidding wars to get the best employees, and therefore can pay them less, the ability to have employees move between companies allows both the employees and the companies the ability to exchange talent and get new ideas.

      Right now, I know people who work in jobs where they have no chance at making the senior levels simply because those levels are f

  • by Animats (122034) on Wednesday June 03, 2009 @12:36PM (#28197373) Homepage

    It's an illegal restraint of trade under US antitrust law. It's not "monopoly", which is sell-side, it's "monopsony", which is buy-side.

    Farmers classically face monopsony situations. This was much worse when most farm products moved only by rail. When there was only one buyer with a rail loading facility in an area, farmers were really screwed. That's why there are so many farmer's cooperatives in the US, and USDA efforts to control monopsonies. For what it was like before that, see "A Deal In Wheat" [gutenberg.org], from 1903.

  • In the technology business, the guy with the money buys up the talent to kill his competition. It was that way before IBM displaced Rand McNally. Microsoft turned it into a sledgehammer. Google headed down that path. Yahoo! said "what up with do no evil beothes?". So, folks made a pact of sorts not to do it.

  • by Weezul (52464)

    Outlaw non-competes & these deals! It'll ultimately raise all tech workers salaries.

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