Europe assisting US with IBM antitrust probe

The European Commission said it has provided information to US regulators looking into possible anti-competitive practices by IBM in the mainframe market
Written by Tom Espiner, Contributor

The European Commission has confirmed that it has provided information to a US antitrust probe into claims IBM abused its dominance of the mainframe market.

Competition spokesperson for the Commission, Jonathan Todd, said on Friday that while European regulators are assisting the US Department of Justice (DOJ) inquiry, it is not an official investigation on the Commission's part.

"I wouldn't like to give the impression this is a joint investigation," Todd told ZDNet UK on Friday. "We've been looking at this for some time. It's not a formal investigation, but we are in contact with the Department of Justice."

IBM said in a statement on Thursday that the DOJ had launched its inquiry by asking for documents from a European antitrust probe into its business practices.

European antitrust regulators carried out an inquiry in January into IBM's business practices after T3, which sells technology compatible with IBM's mainframes, filed a complaint.

Todd said that in addition to providing information on the T3 matter, it also supplied details regarding a market abuse complaint lodged against IBM in 2008 by mainframe company Platform Solutions. Although the complaint was withdrawn following the acquisition of Platform Solutions by IBM in 2008, the Commission is continuing to monitor the mainframe market, said Todd.

US industry association the Computer and Communications Industry Association (CCIA) said the DOJ inquiry was related to a complaint it lodged regarding IBM's business practices. CCIA chief executive Ed Black said that several of the association's members had been asked to give information to the department.

"The inquiry is about a wide range of behaviours," Black told ZDNet UK. "It's a pretty broad inquiry into the mainframe marketplace."

CCIA prepared a white paper with evidence of alleged abuse that it recently submitted to the DOJ. "We hoped that by giving [the Department] evidence, that would trigger an investigation," said Black.

Several CCIA members, some of whom did not wish to be named, had approached the association with complaints about IBM's practices, Black said.

"There are several different groupings of misbehaviour," said Black. "If you were an IBM mainframe customer, but you started dealing with another company to offload mainframe data processing, IBM would threaten to withdraw your mainframe operating system licence. This would scare the company, because a lot of valuable data is locked up in the mainframe."

The CCIA also received complaints that IBM had put pressure on a peripherals firm — one of its business partners — that had developed mainframe emulation software rivalling its technology.

"Basically, customers, business partners or competitors engaged in practices which would mean people would migrate from the [IBM] mainframe or run hardware or programs that would interfere with the mainframe, were blocked," said Black.

IBM did not comment directly on the CCIA's allegations when approached by ZDNet UK. It did, however, comment on a civil case lodged by T3 against it in a New York court.

"Just last week, a US District Court dismissed T3's claims against IBM in their entirety," said IBM. "We understand the Department of Justice has asked T3 for documents from the litigation. IBM intends to co-operate with any inquiries from the Department of Justice.

"We continue to believe there is no merit to T3's claims, and that IBM is fully entitled to enforce our intellectual-property rights and protect the investments that we have made in our technologies."

The DOJ declined to comment on its inquiry on Thursday.

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