Senator, As Senate Rules Chairman, Had Led Fight To Urge Antitrust Investigation Into Merger
Study By Senate Panel Found That Merger Would Have Given ES&S Three Times Market Share Of Next Closest Competitor
U.S. Senator Charles E. Schumer, chairman of the Senate committee that oversees election issues, today applauded the Department of Justice’s decision to require Election Systems & Software to sell off the voting systems unit it purchased from Diebold last November. The consent decree in this case lasts for ten years, ensuring that competition is protected in the voting system industry. Schumer raised serious questions about the merger of ES&S Inc. and Premier Election Systems when it was first revealed in September 2009, because it created one company that would control at least 70 percent of the U.S. market for voting systems. The merger had been completed without any advance notice or consultation with the Justice Department.
“This decision will restore competition to an industry that is critical to our democracy. If left unchallenged, this merger would have created a virtual monopoly that could have done serious harm to the idea of free and fair elections,” Schumer said. “This action will prevent one company from garnering three times the market of its next closest competitor. Localities need choices in their voting machines, just like voters need choices on the ballot.”
Schumer had twice written to the Justice Department urging it to conduct an anti-trust review and break up any threat of monopoly from the merger. The Senate Rules Committee, which he chairs, had conducted its own investigation, including extensive outreach to the state and local election officials who purchase and use voting equipment. On January 21, 2010, Schumer sent information developed by the Rules Committee to the Justice Department for its investigation. The report found that the merger assured ES&S of a presence in 90 percent of the states, made it the sole source for at least 20 states, and ensured it a market share three or more times that of its closest competitor.
“State and local election officials work hard to administer elections fairly and efficiently,” said Schumer. “I heard from many of them who were concerned that this merger could have led to higher prices for voting system, predatory pricing, poor quality service, less product innovation, and other problems. That nine state Attorneys General joined the Department in this suit and consent decree speaks volumes on the importance of competition in this industry.”
States and counties using the Premier system will now have an opportunity to renegotiate their existing contracts with either ES&S or another voting system vendor. That allows the companies to offer competitive prices and services to jurisdictions that might have otherwise been stuck in decades-long contracts with a vendor they did not choose.