FOR IMMEDIATE RELEASE                                          AT
TUESDAY, JULY 2, 1996                              (202) 616-2771
                                               TDD (202) 514-1888


          Termination Due to Change in Computer Climate

     WASHINGTON, D.C. -- The Department of Justice reached a
settlement today with IBM that will terminate, in stages, the
remaining provisions of the government's historic 1956 antitrust
consent decree against the company.  The Department's Antitrust
Division said that it has agreed to terminate the provisions, in
stages ending five years from today, because of changes in the
competitive climate in the computer industry.
     The terms of the proposed settlement, filed in U.S. District
Court for the Southern District of New York (New York City), must
be approved by Judge Allen G. Schwartz.  If accepted by the
court, the settlement would resolve ongoing litigation between
the Department and IBM about the future of the decree.  
     David S. Turetsky, Deputy Assistant Attorney General in the
Antitrust Division, said, "The IBM decree has proved enormously
successful in encouraging competition in various computer markets
over the years.  By extending the life of the decree's main
provisions into the next century, the Department ensures that
those who have made important business decisions based on the
decree will have time to make adjustments before it expires."  
     The decree was entered when the computer age was in its
infancy on the basis of IBM's conduct in the market for old-
fashioned tabulating machines, which worked with punch cards. 
The decree's protections, however, extended as well to electronic
data processing machines.  
     The decree's main provisions required the Armonk, New York-
-based IBM to sell its machines as well as lease them, and
required IBM to provide service and sell parts for IBM computers
after they were no longer owned by IBM.  This created a market in
used equipment that competed with IBM's new machines and limited
its monopoly power in the computer market.
     Earlier the Department agreed to terminate immediately
provisions involving personal computers and work stations-
-markets in which IBM faces considerable competition.  The court
approved this step in January 1996.
     Today's proposed settlement provides for termination of the
decree's main provisions as they apply to midframe computers,
IBM's AS/400 line of products--in four years, and mainframe
computers, IBM's System 390 products--in five years.  A few
provisions of the decree as it applies to AS/400 would terminate
six months after or upon entry of the decree.  A few provisions
of the decree as it applies to System 390 products would
terminate upon entry of the decree. 
     Turetsky said, "The proposed settlement also reflects the
Department's awareness of changes in the competitive climate in
the computer industry.  The proposed settlement is fair to
computer customers, competitors and to IBM."
     The Department will propose that prior to the court's
consideration of the proposed settlement, there be a 60-day
period for public comments, which may be addressed to John F.
Greaney, U.S. Department of Justice, Antitrust Division, Chief,
Computers & Finance Section, 600 E Street, N.W., Suite 9300,
Washington, D.C. 20530, (202) 307-6200.