AP Tech Writer Gives Colluding Companies an Unearned Free Pass

September 5th, 2015 11:30 PM

Here's a little parlor exercise readers can conduct with their friends who think that high-tech CEOs are the innovative saints of the universe.

The game would be to take the first three paragraphs of Michael Liedtke's Associated Press report on the collusion settlement to which that industry's major players just acquiesced, and revise it to reflect a different industry far less favored by the press. Then accurately point out the following: "There is no way this industry would gotten as much sympathy from the press as the AP gave these high-tech titans." After the jump, readers will see how I revised the AP's original first three paragraphs as if the settlement occurred in the oil industry, followed by what the AP's Liedtke actually wrote Thursday afternoon:

BIG SETTLEMENT IN OIL INDUSTRY WAGE CASE HARKS BACK TO DIFFERENT ERA

A federal judge has approved a $415 million settlement that ends a lengthy legal saga revolving around allegations that Exxon Mobil, BP, Chevron and several other oil companies illegally conspired to prevent their workers from getting better job offers.

The case focused on a "no-poaching" pact prohibiting Exxon Mobil, BP, Chevron and other big oil companies from recruiting each other's workers. Lawyers for the employees argued the secret agreement illegally suppressed the wages of the affected workers.

Things have changed dramatically since the class-action lawsuit was filed in 2011. Oil industry employers now regularly raid each other's workforces in search of talented geologists and other experts who might help them find and retrieve new fossil-fuel resources.

Now here is what Liedtke actually wrote (bolds are mine throughout this post):

BIG SETTLEMENT IN TECH WAGE CASE HARKS BACK TO DIFFERENT ERA

A federal judge has approved a $415 million settlement that ends a lengthy legal saga revolving around allegations that Apple, Google and several other Silicon Valley companies illegally conspired to prevent their workers from getting better job offers.

The case focused on a "no-poaching" pact prohibiting Apple, Google and other major employers from recruiting each other's workers. Lawyers for the employees argued the secret agreement illegally suppressed the wages of the affected workers.

Things have changed dramatically since the class-action lawsuit was filed in 2011. Silicon Valley employers now regularly raid each other's workforces in search of talented engineers who might help them come up with new ideas and build technology's next hot product.

See how easy that exercise was?

There is no reasonable argument against the idea that the tech companies' practices suppressed wages. Liedtke really didn't need to include the "lawyers argued" claim — and I don't think he would have included it if just about any other industry had engaged in these practices.

There isn't a chance in Hades that an AP writer would be so nice to the oil industry if it engaged in the degree of collusion Liedtke described in the above and the following paragraphs describing the Silicon Valley scheming:

... More than 64,000 technology workers will receive about $5,800 apiece to settle allegations that their wages were illegally held down by their employers' collusion during that time.

The complaint originally sought $3 billion in damages that could have been tripled under U.S. antitrust law. Based on that figure, the workers could have received more than $100,000 apiece if they prevailed at trial.

Nearly $41 million of the settlement will be paid to lawyers representing the technology workers. That's less than half of the roughly $85 million in fees that the attorneys had sought.

... The lawsuit depicted Jobs as the conniving ringleader of a scheme designed to minimize the chances that top computer programmers and other talented employees would defect to other technology companies.

Even before (Apple CEO Steve) Jobs died in 2011, Apple and its alleged conspirators had changed their ways as part of a 2010 settlement reached in an (sic) U.S. Justice Department investigation.

The competition is so fierce now that Silicon Valley employers dangle huge incentives to lure top programmers away from other companies.

Oh, so they've changed their ways, and that makes what they did before no big deal. Since when?

It's quite reasonable to contend that if the practices and ensuing lawsuit really had occurred in the oil industory, the press would be openly wondering en masse how the industry got away with paying only $415 million instead of getting socked with the $3 billion the plaintiffs sought, or perhaps even triple that, out of their "obscene profits." Congressmen and other opportunistic politicians would have jumped on and stayed on the bandwagon long ago.

All of this is quite two-faced, especially because, just to make one comparison, Exxon Mobil's net income as a percent of its sales has been between 7.8 percent and 10.0 percent of sales during the past four calendar years. Meanwhile, Apple's comparable net income range has been 21.8 percent to 26.6 percent. That's roughly triple the margin Exxon Mobil earns, even though the oil industry requires far more capital investment.

Why don't those in politics and the press who are inclined to play the "obscene profits" game ever go after what can fairly be called "Big Tech"? Even though the industry's major players colluded to deny thousands of workers the market-level wages they should have been earning, it doesn't seem to matter beyond a mild tsk-tsk. Y'know, it's old news, and they've changed their ways.

No they haven't. Just ask any longtime worker at these companies who is being replaced by a holder of an H-1B visa.

Cross-posted at BizzyBlog.com.