Imation Files Anti-Trust Action Against Quantum

Alleging collusion and price-fixing, Imation Corp.filed an anti-trust suit against Quantum Corp. Monday in St. Paul, Minn.Imation accuses Quantum of trying to artificially inflate prices of itsSuperDLT line of tapes by creating a cartel.

Quantum manufactures drives and tapes for the SuperDLTstandard. It introduced SuperDLT last year as a successor to its popular DLTtape line. Third party manufacturers also manufacture SuperDLT, which must passQuantum’s logo certification program. According to Imation, DLT and SuperDLTtape comprise a $900 million chunk of the $2.3 billion tape media market.

“We’ve been restricted from serving this market,” saysJim Milligan, marketing director, data storage media and services, at Imation. He alleges Quantum set aminimum price for SuperDLT-logo tape, preventing Imation from fully competingwith other media manufacturers.

Milligan says legal action was not Imation’s first stepin resolving its issues with Quantum. “We have approached Quantum on thissubject in good faith and tried to negotiate a settlement,” he says. SinceQuantum was unwilling to negotiate, he says Imation chose to sue.

Quantum dismisses the allegations as a matter ofbusiness, rather than justice.  “Theidea there’s an illegal tape cartel is, in our mind, ridiculous,” says MichaelBrown, CEO of Quantum. Quantum believes Imation is suing because it is unableor unwilling to meet the quality standards Quantum has set for the SuperDLTline. According to Quantum, Imation has attempted to qualify DLT tape severaltimes since 1999 and failed each time.

Imation took an additional step to enter the SuperDLTmedia market. It released a non-qualified line of tape compatible with SuperDLTdrives. “We have been working against ANSI standards for cartridges andinterchange,” Milligan says.

“This is the first time someone has tried to ship anon-qualified product in this industry,” says Brown. He says the greatestdanger non-qualified tape poses is to the customer. Since Quantum can make noassurances regard the tapes’ quality, customers who use non-qualified tape runthe risk of damaging their drives.

No dates have been set for further legal action. –ChrisMcConnell