The government and International Business Machines Corp. have reached agreement on the procedures to be used to negotiate a settlement in the Justice Department's 11-year-old antitrust case against the computer giant, the new chief of the antitrust division said yesterday.
Sanford M. Litvack said in his first meeting with reporters that the talks now could move to substantive issues even though the government is still seeking to break up IBM.
"We intend to try to secure structural relief," Litvack said.
But Litvack's remarks brought a quick rebuke from Nicholas Katzenbach, IBM's senior vice president and general counsel, who noted that a U.S. appeals court has encouraged negotiations toward a settlement.
"We will not negotiate on the basis of the structural relief which has been the government's objective in this litigation," Katzenbach said.
Mr. Litvack knows this because we have told him so," Katzenbach said, pointing out that the appeals court judge who urged the bargaining said the government could not talk of seeking its objectives and seeking a settlement at the same time.
There have been at least four settlement negotiation sessions between representatives of the government and IBM. Litvack said this "agreement on procedural points" will allow the parties to "commence discussions on the substance of the matter."
The exchange between the antitrust division chief and IBM came on the same day that IBM said it would not put its chairman, Frank T. Cary, on the witness stand in the case. In exchange, the Justice Department will withdraw its massive subpoena, IBM said.
Instead, testimony will be presented from Cary in three private antitrust suits and depositions by Cary in those cases and the government's case will be submitted for the record.
On other matters, Litvack said the government had not been negotiating with American Telephone & Telegraph Co. about settlement of the case against the Bell System. That case is expected to go to trial in September.
Litvack said he has "absolutely not given up" trying to develop a conglomerate merger case and that he was in the process of deciding whether to bring the government's first shared monopoly case in the iron ore industry, Litvack said.
Litvack said that since he took over last month he has asked division section officials to look at resale price maintenance. Calling such pricing structures "one of the great concerns I have," Litvack said he had not singled out specific idustries, but instead suggested there are broad pricing schemes that raise consumer prices.
In such situations, Litvack said, a manufacturer adopts a suggested list price and through coercive means forces distributors or retailers to maintain those prices artificially.
Litvack said that as part of his management philosophy, he had instituted regular meetings with staff members, morning get-togethers to "interject myself into the process." Those meetings are expected to allow better case management, a long standing problem at the division, Litvack said.