JUSTICE DEPARTMENT FILES SUIT AGAINST THE MATHWORKS INC. AND
WASHINGTON, D.C.- The Department of Justice today filed a civil
antitrust lawsuit against The MathWorks Inc. and Wind River Systems Inc. to
stop the companies from illegally allocating the markets for software used to
design dynamic control systems. The Department said that an agreement between
the two companies eliminates important competition that has driven significant
technical improvements and price reductions for consumers.
The Department’s lawsuit, filed today in U.S. District Court for the Eastern
District of Virginia in Alexandria, Virginia, challenges the agreement between
The MathWorks and Wind River as a violation of Section 1 of the Sherman Act.
At the same time, the Department and Wind River filed a proposed consent
decree that would settle the lawsuit against Wind River. In the event the
Department obtains a final judgment requiring a divestiture of the dynamic
control systems design software at issue, Wind River will cooperate fully to
effect the divestiture. Thus, while Wind River is named as a defendant, it
remains a party to the lawsuit for the sole purpose of effectuating any final
judgment against The MathWorks. The consent decree requires Wind River to
cooperate with any discovery in the case.
Dynamic control system design software enables engineers to develop the
computerized control systems of sophisticated devices, such as anti-lock brake
systems for automobiles, guidance and navigation control systems for unmanned
spacecraft, and flight control systems for aircraft. By automating the steps
of modeling, analyzing, simulating, testing, and generating software code for
these types of control systems, engineers can develop them in a shorter time
at less cost. The MathWorks’ dynamic control system software is the Simulink
product group. Wind River’s competing product is MATRIXx.
“High-technology products like these work behind the scenes to help build some
of the most sophisticated products in our economy,” said Charles A. James,
Assistant Attorney General of the Department’s Antitrust Division. “This
agreement eliminates important competition that has driven significant
technical improvements and price reductions for consumers, including major
aerospace and automotive companies, engineering firms, and governmental
entities.”
According to the complaint, in February 2001, The MathWorks and Wind River,
which were head-to-head competitors for the development and sale of dynamic
control system design software tools, entered into an agreement that ended
competition between the two firms. The agreement gave The MathWorks the
exclusive right to sell Wind River’s MATRIXx products and required Wind River
to stop its own development and marketing.
The Department’s lawsuit alleges that the agreement with Wind River gave The
MathWorks control over the prices, marketing, support, and future development
of the Wind River dynamic control system design tools. The MathWorks has
announced its intention to undertake no further development of the Wind River
MATRIXx products. For more than 10 years before the agreement, MATRIXx and the
Simulink products competed on the basis of price, customer support and
improved features.
The MathWorks is a Delaware corporation with its principal place of business
in Natick, Massachusetts. The MathWorks posted revenues of approximately $200
million in 2001, on sales of a range of mathematical-based software products
for numeric computation, visualization and simulation used in the design of
sophisticated products. In 2001, sales of The MathWorks’ dynamic control
system design tools were over $100 million.
Wind River is a Delaware corporation with its principal place of business in
Alameda, California. Wind River’s principal products are embedded operating
systems and integrated development environments. For the year ended January
2001, Wind River reported worldwide revenues of $438 million. Included in this
total are approximately $13 million in sales of Wind River’s dynamic control
system design tools.
