More antitrust scrutiny for IT sector

The Justice Department has opened a probe into agreements reached between tech companies over hiring away top talent from each other, according to the Washington Post.

The article, citing unnamed sources, said the investigation is preliminary, with a specific focus on Google, Yahoo, Apple and Genentech. But it also described it as a broader, “industry-wide” probe exploring potential anticompetitive practices in the tech sector.

It’s no secret that competition for top talent in IT is fierce. One need not think back too far to recall the IBM’s legal battle with Mark Papermaster, the executive hired away by Apple, which IBM alleged was a breached of a non-compete agreement he had signed.

Then there was the fracas in 2005, when Microsoft sued Google in 2005 for poaching Kai-Fu Lee, one of its star engineers.

But looking ahead, the bottom line here is that this rumored probe is just the latest sign of mounting regulatory scrutiny the tech industry is facing. As the tech industry matures, it could be that the argument that regulation would choke off innovation and hamstring growth is beginning to ring hollow.

There are clear leaders in certain corners of the industry, with no convincing signs of an imminent shakeup. A common refrain along these lines is that Google’s simply getting too big.

Stories describing Google as sitting in the crosshairs of the antitrust authorities in Washington have become a common occurrence dating back to the ill-fated advertising partnership with Yahoo last year. They often begin something like, “Despite its close ties with the Obama administration, Google is increasingly the target of antitrust …”

Indeed. We’ve already seen antitrust inquiries into its Book Search settlement and the two Google directors who also sit on the board of Apple.

Then again, is anyone going to be surprised to see this administration take a tougher stance on antitrust issues than the previous?

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