That’s hardly surprising. The amount of data produced by businesses is prodigious. One digital-archiving vendor claims it has already upped its storage capability to two petabytes, which is roughly 1,600 times the amount of information in the 17 million books in the Library of Congress.
The convergence of mobile phones with computers will cause even more problems. Says Schwarz: “This unified messaging — where your voice mail comes across your E-mail — is a records-management and litigation nightmare.”
Nightmare is right. As John Mancini, president of the Association for Information and Image Management International, points out, businesses had hundreds of years to figure out how to manage paper records, and many still didn’t get it right. “We are in the very early stages of a revolution [from paper to digital],” he warns. “Businesses are going to be wrestling with this question for quite some time.” — E.A.G.
Analyst Freeze-Outs: Everyone’s a Critic
In September, when the SEC asked Altera Corp. for information about the company’s dealings with equity analysts, the request was barely noticed. But privately, some insiders saw the question as the opening salvo in a coming SEC campaign to curb a growing problem: corporate retaliation against negative analysts.
While Altera denies any wrongdoing, freeze-outs of negative analysts have long been an open secret. And despite efforts to keep investment bankers from influencing analysts, some public issuers continue to shun analysts who offer caustic comments. Says George Kramer, a lawyer with the Securities Industry Association: “It’s a continuing problem.”
This may be changing — and soon. SEC boss Christopher Cox has indicated that the agency’s staff is looking into the issue and fully intends to “tackle” the problem. Whether that tackling involves industry self-regulation or government sanctions remains to be seen. Neither would be good for public companies. Newspaper stories or SEC reports detailing how corporate managers ostracize honest analysts could prove to be a public-relations disaster — and could ensnare scores of businesses. As David Weild IV, a former official at Nasdaq, notes, analyst freeze-outs remain “the rule rather than the exception.” — Stephen Taub
Pricing Strategies: Predators’ Bill
This month, the Federal Trade Commission and the Department of Justice will commence a yearlong series of joint public hearings. The topic of the get-togethers? Section 2 of the Sherman Antitrust Act, which prohibits exclusionary single-company conduct — things like anticompetitive behavior and predatory pricing.
The question of how companies set prices for their products and services is getting plenty of regulatory attention these days. In January, executives at South Korean microchip maker Hynix Semiconductor Inc. pleaded guilty for their part in a scheme to fix the price of computer memory chips. In March, the DoJ confirmed that it is investigating possible price fixing among the major recording labels for online music. Microsoft, Netflix, Illinois Tool Works, and other companies have all come under scrutiny lately regarding their pricing tactics.