ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, August 14, 1996 TAG: 9608140041
SECTION: BUSINESS PAGE: B8 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: ASSOCIATED PRESS
The Justice Department's antitrust division has asked IBM Corp. and Storage Technology Corp. to turn over documents to see if a deal between the two is damaging competition in the mainframe computer market, officials said Tuesday.
Storage Technology Corp. of Louisville, Colo., disclosed it received a civil investigative demand - the civil equivalent of a subpoena - from the Justice Department antitrust division on July 30 concerning an agreement to supply computer storage systems to IBM Corp.
The company mentioned the investigation in a quarterly filing late Monday with the Securities and Exchange Commission. IBM spokesman Cary B. Ziter also confirmed his company received such a civil inquiry.
Justice spokesman Bill Brooks gave only a brief statement on the probe: ``We do have an investigation looking into possible anticompetitive practices in the direct access storage devices industry.''
Ziter and StorageTek spokeswoman Judith Hargrave said both companies are cooperating with the Justice investigation. The probe focuses on a June 10 pact by which IBM agreed to resell StorageTek subsystems for storing data processed by large computers, such as mainframes.
``In a broad sense, what the government is trying to do is find out about the deal,'' Ziter said. ``Certainly, IBM believes that this is an agreement between IBM and Storgetek that is not in conflict with the antitrust laws.''
Under the agreement, IBM on July 1 became the main distributor of StorageTek's products. Financial terms were not disclosed.
StorageTek's Iceberg, Kodiak and Arctic Fox systems are available to IBM to resell under its own names. The companies said they plan to integrate IBM technology into StorageTek products. IBM also will pay for future enhancements to the StorageTek products.
IBM customers stand to benefit through a broader array of choices for data storage, Ziter said.
While the alliance unites their work in high-capacity data drives, IBM and StorageTek will continue to work separately on products that use tape for storing data.
Ziter said IBM and StorageTek will ``remain vigorous competitors'' in tape and optical storage devices.
LENGTH: Short : 50 linesby CNB