The merger of the nation's two largest suppliers of electronic voting machines has election officials, good government groups and a U.S. senator asking the Justice Department to take a hard look at the rapidly contracting voting machine industry.
Facing a sea of red ink after seven years in the voting machine market, Ohio-based Diebold Inc. announced this month the sale of its subsidiary Premier Election Solutions to its main rival, Nebraska-based Election Systems & Software.
Election officials said they are concerned about the sale, not just because it might drive up prices by reducing competition, but the consolidation of the two companies' resources might telegraph cuts in customer service.
"It would be fine if they were selling Snickers bars," said David Orr, clerk of Cook County, Ill. "But their product is the livelihood of the nation's democracy. I think the quality [of service] is going to be hurt."
Orr said the merger highlights an urgent need for Congress and Obama administration officials to step up regulation of voting machine vendors, who have struggled to make sales since 2006, when all states were required to upgrade voting equipment under the Help America Vote Act.
Orr's concerns echo those of Sen. Charles Schumer, D-N.Y., a member of the Senate Judiciary Antitrust Subcommittee, who last week wrote to Attorney General Holder urging an antitrust review of the Diebold sale.
"This acquisition may have serious adverse implications for how our country votes," wrote Schumer, who warned that the business deal could result in one company's control of over 75 percent of the U.S. market for voting systems.
"Since this industry provides a product vital to American governance, I am asking that the Antitrust Division examine this acquisition carefully to make sure there is no anticompetitive impact on election officials, states, or voters," Schumer said.
The Antitrust Subcommittee, chaired by Sen. Herb Kohl, D-Wis., has not launched any review of the merger, according to a Senate Judiciary aide.
Common Cause, an open government advocacy organization led by former Rep. Bob Edgar, D-Pa., is trying to start a grassroots campaign to press for a federal antitrust investigation.
The group is activating its network of about 400,000 activists to sign a petition asking Assistant Attorney General Christine Varney, who heads the Justice Department's Antitrust Division, to take up the matter.
A Justice spokeswoman declined to comment on whether review may be launched. The department has 30 days from the date it was notified of the sale by Diebold to decide whether a review is warranted. While it is not clear when the department was notified, public announcement of the sale occurred Sept. 3.
R. Doug Lewis, executive director of the National Association of Election Officials, said the merger between Diebold and Election Systems & Software was not surprising, because the market's cluster of suppliers has long struggled to make money on the sale of equipment.
"Any time you have fewer suppliers rather than more, that is going to be of concern," said Lewis, adding that the market for voting machines is likely to keep shrinking until the economy improves and demand for new products increases. "This is only the beginning, not the end."