IBM Corp is seeking to have overturned the 1956 anti-trust consent decree and subsequent amendments in 1963 and 1970, the Wall Street Journal reported. IBM is said to be arguing that times have changed radically over the past 38 years, that it no longer dominates the industry in the way that it did, and that terms of the decree unfairly handicap its ability to compete effectively. There is certain to be fierce opposition to any relaxation on the grounds that despite its less dominant position, its installed base is still enormous, and that IBM is still three times the size of the next biggest US computer manufacturer. In the computer services sector, IBM is constrained to operate any business as an arm’s length subsidiary that has to buy any IBM equipment at full market price where competitors such as Electronic Data Systems Corp can twist IBM’s arm, play it off against Hitachi Data Systems Ltd, where EDS has 20%, and get the best possible price. Maintenance and reseller firms have benefitted from the consent decree, and are also likely to contest any relaxation fiercely. When IBM takes a machine back from a customer, it is not permitted to resell it immediately, but is required to hold it for at least 60 days, and if it then sells it on to a broker, must do so at what it contends is an artificial price.
