Brussels launches two competition probes into IBM

26 Jul 2010

The European Commission has today announced it is launching two separate antitrust investigations into the US computer manufacturer IBM to investigate whether it infringed EU competition rules in the market for mainframe computers.

The first case follows complaints by emulator software vendors T3 and Turbo Hercules and focuses on IBM’s alleged tying of mainframe hardware to its mainframe operating system.

The second probe is an investigation begun on the Commission’s own initiative of IBM’s alleged discriminatory behaviour towards competing suppliers of mainframe maintenance services.

Mainframes are powerful computers which are used by many large companies and government institutions worldwide to store and process critical business information. It is estimated that the vast majority of corporate data worldwide resides on mainframes. In 2009, approximately €8.5bn was spent worldwide and €3bn in the European Economic Area on new mainframe hardware and operating systems.

IBM is alleged to have engaged in illegal tying of its mainframe hardware products to its dominant mainframe operating system. The complaints claim that the tying shuts out providers of emulation technology, which could enable the users to run critical applications on non-IBM hardware.

In addition, the Commission has its own concerns that IBM may have engaged in anti-competitive practices with a view to keeping potential competitors out of the market, in particular by restricting or delaying access to spare parts for which IBM is the only source.

The Commission said today that the initiation of these two probes does not imply that it has proof of infringements by IBM – just that it intends to investigate the cases as a matter of priority.

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