October 8, 2009 5:43 PM

Cravath Reprises Its Role as IBM's Antitrust Counsel

Posted by Zach Lowe

Just as it did 40 years ago, IBM is turning to Cravath, Swaine & Moore to defend itself in the midst of a federal antitrust probe of possible anticompetitive business practices in its marketing of mainframe computer technology, according to a source close to the situation.

U.S. Department of Justice officials this month have been asking IBM's competitors for information on the tech giant's business practices, according to The New York Times and The Wall Street Journal. The regulators are investigating whether IBM has abused its position as the world's dominant supplier of mainstream hardware and software in order to maintain a virtual monopoly in that market, according to the papers.

As many of our readers surely remember, this is not the first time the Justice Department has trod this path. Way back in 1969, when the Mets, not the Yankees, were the baseball story in New York, the federal government filed a lawsuit claiming IBM engaged in anticompetitive business practices to maintain a monopoly in the mainframe market. Thirteen years later, in 1982, Reagan-era officials dropped the case in what was then considered quite an embarrassment for the government. 

A Cravath team that included David Boies represented IBM in that inquiry, according to this nice summary of the case at the WSJ's Law Blog. 

Federal regulators are investigating whether IBM manipulated the market by refusing to license its mainframe software to companies who build hardware systems designed to compete with IBM, the NYT and WSJ say. Rivals have also complained that IBM has required companies who buy its software to also purchase its mainframe hardware.

Cravath declined to comment on the matter.

As the NYT and WSJ report, IBM last week won a dismissal of a civil suit accusing IBM of various anticompetitive practices. Quinn Emanuel Urquhart Oliver & Hedges and Hogan & Hartson represented IBM in that litigation, court records show.

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