Washington, Dec 20: International Business Machines Corp and Storage Technology Corp have agreed to compete again in the multi-billion market for mainframe disk storage, the justice department announced.

The two firms were competitors until StorageTek agreed to sell all of its product to IBM in 1996.

"Price declines in the industry eased after StorageTek and IBM stopped competing against each other," the justice department said. So the justice department intervened."Vigorous competition is what drives the significant technical improvements and price reductions that we have seen in these products in recent years and we won't tolerate private arrangements," said Joel Klein, assistant attorney general in charge of the antitrust division of the justice department.

Pending court approval, the two companies have agreed that StorageTek will sell to many customers, not just IBM. The two are among only four competitors in the production of mainframe disk storage.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.