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E.U. launches antitrust investigations into IBM

The European Union’s antitrust regulators said Monday they have launched two formal investigations into IBM for alleged antitrust abuses in the mainframe computer market.

In a news release, the European Commission said it is investigating allegations by software competitors T3 and Turbo Hercules that IBM tied its mainframe operating system to sales of its mainframe hardware. By doing so, the companies said IBM unfairly cut out competing software providers who wouldn't get access to IBM's mainframe computer customers.

The second investigation was brought by the regulators themselves and involve allegations that IBM discriminated against 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,” the EC said in the release. “It is estimated that the vast majority of corporate data worldwide resides on mainframes.”

IBM said it is cooperating fully with E.U. regulators and that the allegations are being brought by competitor Microsoft and its “satellite proxies.”

The investigation by Europe comes amid increased interest by antitrust regulators at the Justice Department, who are informally inquiring about IBM’s mainframe business practices. The Computer & Communications Industry Association requested an investigation into IBM’s practices this year.

The Justice Department inquiry, however, isn’t formal at this stage, and U.S. regulators appear to be watching the European Commission as it takes a lead on allegations of anti-competitor behavior, according to a source familiar with the inquiries in Europe and the United States. IBM downplayed the significance of its mainframe market share in the overall business computing landscape.

“Today, the mainframe server is a small niche in the overall, highly competitive server landscape, but it remains a source of great value for those IBM clients who value its high levels of security and reliability,” said James Sciales, a spokesman at IBM.

By Cecilia Kang  |  July 26, 2010; 11:51 AM ET
Categories:  Antitrust , DOJ  
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Comments

Some nerve. How about the US launch an investigation into Aérospatiale and their anti-competitive practices. The effing Europeans are bankrupt so now they want to go after us. Screw them!

Posted by: adrienne_najjar | July 26, 2010 3:09 PM | Report abuse

> “Today, the mainframe server is a small
> niche in the overall, highly competitive
> server landscape, but it remains a source
> of great value for those IBM clients who
> value its high levels of security and
> reliability,” said James Sciales, a
> spokesman at IBM.

Bet this guy's next assignment is shoveling waste at the nearest IBM documentation mill, if he still has a job at all. He's certainly never going to be allowed to talk to outsiders ever again.

This is known at IBM as a "career limiting move". Mainframes may be ancient history to a lot of the small fry, but they still print the bills and write the checks for most of the Real World, and Thou Shalt Not Disparage The Product In Front of The Customers.

Bad spokesperson. No donut.


Posted by: dboyes99 | July 26, 2010 6:11 PM | Report abuse

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