Justice Dept. to Ease 1956 I.B.M. Decree

By Dow Jones

April 26, 1996

The Justice Department has agreed this week with I.B.M. that another portion of the 1956 consent decree restricting the company's operations should be terminated.

But the department and the company still disagree over how quickly those restrictions, which affect I.B.M.'s AS/400 midrange computers, should be lifted. And the Government has not yet decided whether it will support I.B.M.'s efforts to end the decree's restrictions on I.B.M. mainframe computers. A final decision on ending the decree is up to a Federal judge.

The 1956 decree placed restrictions on the International Business Machines Corporation that made it tougher for the company to dominate the then-fledgling computer industry in sales, leasing and service. I.B.M. was compelled to operate its computer-services operations as a separate entity.

Gina Talamona, a Justice Department spokeswoman, said the department told United States District Judge Allen Schwartz earlier this week that "we'd support termination with a phase-out provision" for the restrictions on midrange computers.

She declined to comment on how long a phase-out the department would seek; that proposal is due by May 22. In addition, the department will announce by June 28 its position on terminating the mainframe portions of the decree, she said.