EU opens anti-trust probe into IBM

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European Union competition regulators launched two anti-trust investigations yesterday (26 July) against International Business Machines Corp., suspecting it of abusing its dominant position in the mainframe computer market.

One investigation followed complaints by emulator software vendors T3 and TurboHercules against IBM's practices, and focuses on the US computer giant's alleged tying of mainframe hardware to its mainframe operating system.

The second probe, opened on the European Commission's own initiative, concerns alleged discriminatory behaviour towards competing suppliers of mainframe maintenance services.

"The Commission has concerns that IBM may have engaged in anti-competitive practices with a view to foreclosing the market for maintenance services […] in particular by restricting or delaying access to spare parts for which IBM is the only source," said the Commission.

The Commission enforces EU competition rules and can fine companies that break them.

IBM rejected the allegations, but promised to cooperate fully with the investigation.

"IBM is fully entitled to enforce its intellectual property rights and protect the investments we have made in our technologies," the company said in a statement.

It said Microsoft and its other big competitors had inspired the Commission's action.

"The accusations made against IBM by TurboHercules and T3 are being driven by some of IBM's largest competitors – led by Microsoft," it said, adding that in this way the software giant wanted to cement the dominance of its Wintel servers.

A local Microsoft spokesman had no immediate comment.

IBM shares had dipped 0.5% in a flat US market by 13:56 GMT yesterday.

Mainframes are powerful computers which many large companies and government institutions use to store and process critical information. The vast majority of corporate data worldwide resides on mainframes.

In 2009 customers spent approximately 8.5 billion euros worldwide and three billion euros in the European Economic Area on new mainframe hardware and operating systems.

The Commission said that T3 and TurboHercules had alleged IBM had been illegally tying its mainframe hardware products to its dominant mainframe operating system.

According to the complaints, the tying shuts out providers of emulation technology, which enables users to run applications on non-IBM hardware.

(EURACTIV with Reuters.)

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