Blog on the Run: Reloaded

Tuesday, January 28, 2014 10:09 pm

What happens when “Don’t Be Evil” meets evil

Filed under: Evil,Hold! Them! Accountable!,I want my money back. — Lex @ 10:09 pm

Oh, stuff like this:

In early 2005, as demand for Silicon Valley engineers began booming, Apple’s Steve Jobs sealed a secret and illegal pact with Google’s Eric Schmidt to artificially push their workers wages lower by agreeing not to recruit each other’s employees, sharing wage scale information, and punishing violators. On February 27, 2005, Bill Campbell, a member of Apple’s board of directors and senior advisor to Google, emailed Jobs to confirm that Eric Schmidt “got directly involved and firmly stopped all efforts to recruit anyone from Apple.”

Later that year, Schmidt instructed his Sr VP for Business Operation Shona Brown to keep the pact a secret and only share information “verbally, since I don’t want to create a paper trail over which we can be sued later?”

These secret conversations and agreements between some of the biggest names in Silicon Valley were first exposed in a Department of Justice antitrust investigation launched by the Obama Administration in 2010. That DOJ suit became the basis of a class action lawsuit filed on behalf of over 100,000 tech employees whose wages were artificially lowered — an estimated $9 billion effectively stolen by the high-flying companies from their workers to pad company earnings — in the second half of the 2000s. Last week, the 9th Circuit Court of Appeals denied attempts by Apple, Google, Intel, and Adobe to have the lawsuit tossed, and gave final approval for the class action suit to go forward. A jury trial date has been set for May 27 in San Jose, before US District Court judge Lucy Koh, who presided over the Samsung-Apple patent suit.

In a related but separate investigation and ongoing suit, eBay and its former CEO Meg Whitman, now CEO of HP, are being sued by both the federal government and the state of California for arranging a similar, secret wage-theft agreement with Intuit (and possibly Google as well) during the same period.

The secret wage-theft agreements between Apple, Google, Intel, Adobe, Intuit, and Pixar (now owned by Disney) are described in court papers obtained by PandoDaily as “an overarching conspiracy” in violation of the Sherman Antitrust Act and the Clayton Antitrust Act, and at times it reads like something lifted straight out of the robber baron era that produced those laws. Today’s inequality crisis is America’s worst on record since statistics were first recorded a hundred years ago — the only comparison would be to the era of the railroad tycoons in the late 19th century.

I’m delighted that the class-action lawsuit is going forward. But I still see two huge problems:

  1. The money that all those employees would have been paid in an unrigged labor market — estimated here at $9 billion — is lost to them forever and likely staying with the executives forever.
  2. Lawsuits are all well and good, but anyone who has passed Econ 101 knows that this arrangement violated antitrust law. The executives involved need to face serious criminal charges. This action constituted criminal fraud and conspiracy, plain and simple, and possibly other crimes that aren’t so simple.

Nothing is going to stop this crap until rich and famous corporate executives start getting frog-marched around in orange jumpsuits on live TV before being locked away long enough for all their tech knowledge to become worthless, along with most of their teeth.

 

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2 Comments »

  1. “The executives involved need to face serious criminal charges”

    That doesn’t happen any more.

    Comment by Roch — Wednesday, January 29, 2014 8:23 am @ 8:23 am | Reply

    • Yeah, I know. Sucks, dunnit?

      Comment by Lex — Wednesday, January 29, 2014 10:26 pm @ 10:26 pm | Reply


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