Ever felt like you don't get paid enough? Well, for
around 60,000 employees of tech giants like Google and Apple, they
were oh so right.
There's a class action on foot in the US alleging that tech
heavyweights like Apple, Google, Intel and Adobe formed an illegal
cartel in which they agreed not to poach each other's
employees. The effect was to illegally fix the market for tech
workers. It's reported that, if successful, damages could
exceed $9 billion. That's a B, not an M. Billion. And on top of
that, new documents revealed last week potentially implicate around
20 new companies in the cartel. It's a veritable who's who
of Silicon Valley.
In the US and Australia alike, there are strong anti - cartel
laws. The gist is that making agreements with your competitors is
bad. First you are likely to be investigated by the competition
regulator. Here it's the ACCC. In the US, it's the
Department of Justice. Next you are likely to pay pecuniary
penalties. In Australia, maximum penalties start from $10 million.
Last comes the civil action by the people affected by the cartel.
That's where you pay the mega bucks.
Big cartels like the Silicon Valley salary cartel are routinely
hung out to dry, and not just in the US. In Australia, the last
great cartel was the air cargo price fixing cartel. Altogether the
airlines involved have paid around $60 million in penalties so far.
And the class action is just firing up.
What's interesting about this case is that the conduct of
the companies was really blatant and open. They clearly didn't
think that colluding with your competitors to not poach each
other's employees could be illegal behaviour. But it's no
different from any other kind of market carve - up. Whether buying
or selling, computers or people, agreeing not to compete is a
cartel and it can get you in big trouble.
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