Steve Jobs to Ed Colligan: Dear sir, let's collude
Jon Rubinstein. Photo: Palm, Inc.
"We must do whatever we can to stop this."
That's how Apple (AAPL) CEO Steve Jobs is reported to have asked then Palm (PALM) CEO Ed Colligan to enter into a possibly illegal agreement to stop trying to hire away each others' top engineering talent.
If accurate, it may be one of the most stilted attempts to collude ever recorded.
Colligan's answer, according to Bloomberg's Connie Guglielmo, who says she has reviewed the two-year-old communications:
"Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal."
Is this really how conspirators talk?
Apparently so in Silicon Valley, where hiring practices long overlooked have come under increased scrutiny by the Obama administration.
Google's anti-poaching smoking gun
Back in June, before the ties that bound the two companies unraveled and Google's (GOOG) Eric Schmidt resigned from Apple's (AAPL) board of directors, the New York Times reported that the U.S. Department of Justice had begun an antitrust investigation into the two companies' hiring practices.
The issue was whether Apple and Google had made an anti-poaching deal — an agreement not to go fishing each others' talent pool — that could be considered a collusive restraint on trade.
The Times had obtained an e-mail from a Google recruiter that was very suggestive. It asked one job candidate to reach out to another potential candidate.
"It is a bit touchy since he works for Apple,” the recruiter wrote, adding that Google had “a nonsolicit agreement with them.”
But the authenticity of the e-mail could not be verified and the recruiter, who has since left Google, said she didn't recall sending it.
Now we have what looks like a smoking gun.
Antitrust: Apple and AT&T in DOJ's sights
The U.S. government agencies in charge of policing antitrust violations — long dormant under the Bush administration and newly revitalized under Barack Obama's — seem to be circling closer to Cupertino.
According to a report Monday in the Wall Street Journal's online edition, the Department of Justice has begun an initial review of the U.S. telecommunications industry to determine whether the two dominant players — AT&T (T) and Verizon (VZ), which together control 90 million U.S. landlines and 60% of the country's 270 million wireless subscribers — are abusing the market power they have amassed in recent years.
Although not a primary target of the probe, Apple (AAPL) could get ensnared in it, according to the Journal's report.
"Among the areas the Justice Department could explore," writes the WSJ's Amol Sharma, "is whether wireless carriers are hurting smaller competitors by locking up popular phones through exclusive agreements with handset makers, according to [people familiar with the matter.] In recent weeks lawmakers and regulators have raised questions about deals such as AT&T's exclusive right to provide service for Apple Inc.'s popular iPhone in the U.S."
