Richard Thomas deLamarter collection of IBM antitrust suit recordsCreation: 1950-1984
The IBM antitrust suit records are a collection assembled by Richard Thomas DeLamarter, a senior economist working for the Department of Justice on the case from 1974 to 1982. He is the author of Big Blue: IBM's Use and Abuse of Power (New York: Dodd, Mead & Company, 1986).
- Creation: 1950-1984
- DeLamarter, Richard Thomas (Person)
40.5 Linear Feet
International Business Machines Corporation (IBM) became a giant in the field of electronic data processing by the mid-1950s after having achieved great success in the punch-card tabulating machine business in the 1930s. IBM had an image as offering superior products at a lower price than their competitors. IBM customers were portrayed as loyal and satisfied with the service provided by “Big Blue”
IBM's success, particularly with their System/360, was a cause for distrust and suspicion by both their competitors and the federal government. Preliminary inquiry was made in the mid-1960s by the U.S. Department of Justice as to antitrust violations by IBM. The complaint for the case U.S. v. IBM was filed in U.S. District Court, Southern District of New York on January 17, 1969 by the Justice Department. The suit alleged that IBM violated the Section 2 of the Sherman Act by monopolizing or attempting to monopolize the general purpose electronic digital computer system market, specifically computers designed primarily for business.
There were several charges against IBM. The government contended that IBM planned to and did eliminate emerging competition that threatened the erosion of IBM's monopoly power by devising and executing business strategies which were not illegal, but which did not provide users with a better price, a better product or better service. Specifically, it was alleged that IBM had hindered the development of service and peripherals competitors by maintaining a single price policy for its machines, software and support services (bundling); it had granted discounts for universities and other educational institutions and by so doing influenced those places to select IBM computers; and that IBM had introduced underpriced models knowing that they could not be produced on time and did this to prevent the placement of competitors' machines. For example, IBM had prematurely announced new systems such as System/360 claiming that it was a superior product and that its introduction was imminent when in fact, it was several years from completion.
The trial began May 19, 1975 and spanned a period of over six years. After thousands of hours of testimony (testimony of over 950 witnesses, 87 in court, the remainder by deposition) and the submission of tens of thousands of exhibits, the case was withdrawn by William F. Baxter, assistant attorney general in charge of the Antitrust Division, Department of Justice, on January 8, 1982. Baxter signed a Stipulation of Dismissal that stated the government's charges were “without merit” It was later discovered that Baxter had failed to disclose that he had been retained as a consultant to a West Coast law firm defending IBM in private antitrust cases.
Baxter had reviewed the case and met with both sides in 1981. His reasoning for dismissing the case was that the Antitrust Division's view regarding Section 2 violations had evolved since the commencement of the suit; the government was backing off antitrust actions. Baxter believed that the cost of continuation would be too high and that the government was unlikely to win the case. Baxter maintained that IBM had achieved its large market share legally without resorting to predatory practices, and that Section 2 could not filed against a company because of its success.
Scope and Content
The IBM antitrust suit records are a collection assembled by Richard Thomas DeLamarter, a senior economist working for the Department of Justice on the case from 1974 to 1982. He is the author of Big Blue: IBM's Use and Abuse of Power (New York: Dodd, Mead & Company, 1986). He believed that IBM was, and continues to be, a monopolist. DeLamarter used records from the case, particularly plaintiff exhibits, to substantiate his argument.
The IBM Antitrust Suit Records offer an opportunity to examine in detail not only the suit brought against IBM by the Department of Justice, but also the history of the computer industry and IBM, and the evolution of antitrust law.
The Exhibits series consists of plaintiff exhibits for the suit U.S. v. IBM and includes records generated by IBM and its executives including internal memos, speeches, executive office correspondence, appointment diaries of Cuthbert C. Hurd (former IBM director of applied sciences in the early 1950s and later consultant to IBM), product announcements, and 10-K financial forms. There are also IBM handbooks and manuals on principles of time sharing, basic principles of COMSTAT, and an IBM Lease/Purchase Guide. The studies and reports cover such subjects as selective pricing, market share and environment, System/360, unbundling, and rental and purchase policies. Some reports analyze IBM's competitors in the computer industry. Other plaintiff exhibits include computer industry reports and studies by companies such as International Data Corporation, Arthur D. Little, Inc., and the Diebold Group; and records generated by IBM's competitors. The exhibits are not a complete set.
Testimony and transcripts series are from the court case containing testimony of economic consultants acting as witnesses for IBM and the government. Both are incomplete and represent only a small portion of the amount produced by the case.
Legal papers: U.S. v. IBM series includes memoranda, motions, affidavits, briefs, opinions, complaints, answers, and petitions generated for the case by the plaintiff, defendant, and Judge Edelstein. These papers document such topics as IBM seeking to recuse Judge Edelstein, IBM contesting the government's reopening of discovery, the government's economioc analysis of the market for general purpose electronic digital computer systems, the plaintiff's statement of triable issues, and assistant attorney general Baxter's prior involvement as a legal consultant to IBM. Missing legal papers generated for the case.
Department of Justice records series (Subject to a 25-year time seal) was primarily generated by or used by the U.S. Department of Justice for the case. Findings of Fact (1981) were compiled by the economic staff at the Antitrust Division using transcripts, exhibits, IBM documents, testimony, computer industry studies, and narrative statements to strengthen the government's position that IBM was a monopoly in the prosecution of the case. Additional Department of Justice records include reports and memos and deposition summaries (1971-1974) of witnesses for U.S. v. IBM and several other cases in which IBM was a defendant. The summaries include background information of the deponent's career, information on exhibits generated by or for the deponent, and a recap of the deponent's testimony.
IBM records series contains documents generated by IBM that were not listed as exhibits. They include IBM business conduct policies guide; company studies on International Computers Ltd. and Sperry Rand; Data Processing Division Administrative Terms; Greybooks containing data on various IBM computers; memos on market share, adjustments, remote computing strategy, data entry strategy, new applications for System/370, and fixed term plan; presentations to IBM board of directors; product announcements and prices; sales manuals; and information on assets and billings, production descriptions, leasing and manufacturing strategy.
The Computer industry reports/studies series contains reports and studies generated by computer consulting companies such as Arthur D. Little, Inc (1956-1980); Diebold Group (1960-1978); and International Data Corporation (IDC) (1967-1980). These reports and studies cover a wide variety of electronic data processing-related topics and contain information on memory, peripherals, leasing, maintenance, the market, disk drives, the computer industry, forecasts, and IBM products.
No restrictions on access; this collection is open for research.
Language of Materials
Gift of Richard DeLamarter, 1989
- Folded, Spindled, and Mutilated: Economic Analysis and U.S. v. IBM (Cambridge, MA: The MIT Press, 1983)
- IBM and the U.S. Data Processing Industry: An Economic History (New York: Praeger Publishers, 1983)
- Big Blue: IBM's Use and Abuse of Power (New York: Dodd, Mead & Company, 1986)
Finding Aid & Administrative Information
- Richard Thomas deLamarter collection of IBM antitrust suit records
- Lynn Ann Catanese
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