Diebold/ES&S: AntiTrust Investigation and Suit

Wired story, Antitrust Concerns Swirl Around Sale of Diebold Voting Machines, by Kim Zetter <read>

Sen. Charles Schumer asked the Justice Department’s antitrust division on Monday to investigate the recent sale of Diebold’s voting machines division to a competitor, saying the deal raises anti-competitiveness concerns and has “adverse implications on how our country votes.”…

The sale gives ES&S, already the largest voting machine maker in the country, a near monopoly on the voting machine industry. According to the company’s website, its systems, used in 43 states, counted “approximately 50 percent of the votes in the last four major U.S. elections.”

Hart InterCivic, a voting machine firm based in Texas, filed an antitrust suit (.pdf) on Friday, seeking a temporary and permanent injunction against the sale. According to the suit, the sale “poses a significant and imminent threat of irreparable antitrust injury to plaintiffs.”…

The suit alleges that Diebold and ES&S have long engaged in anti-competitive practices to win bids “through both legitimate and illegitimate acts and conduct.”

This behavior includes submitting low-ball bids to get contracts, after which the companies allegedly gouge customers with additional expenses for after-market service and upgrades. The suit alleges the companies also exaggerate the capabilities of their systems, misrepresent the status of their certification and exert improper and undue influence on government officials to win contracts.

This sale would make a bad situation.  Once a company selles its equipment to a state or county, it has a virtual monopoly.  This is not just theoretical.  Read the VotersUnite report from last year and Connecticut implications.

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