IBM offers concessions in EU antitrust probe

The mainframe specialist has offered to provide spare parts and information to support rivals in a bid to avoid further EU scrutiny of its business practices
Written by Ben Woods, Contributor

IBM has offered to provide resources to mainframe support rivals in order to put an end to a European Commission antitrust investigation into its business practices.

European Commission

IBM has offered to make concessions to bring to an end a European Commission investigation of alleged anti-competitive actions.

The company has committed to supplying spare parts and other technical information on "reasonable and non-discriminatory" terms to third-party maintainers, the Commission said on Tuesday. IBM has proposed the offer would last five years.

"These commitments aim to resolve concerns that IBM may have imposed unreasonable conditions for supplying competing mainframe maintenance service providers with such inputs, in breach of European Union antitrust rules prohibiting the abuse of a dominant market position in Europe," the Commission said in a statement.

European regulators began looking at IBM's mainframe support services in July 2010, in a probe arising out of its own concerns that the company was discriminating against competing providers.

In August this year, the regulators released preliminary findings in the support services investigation. In this, they said IBM "may have abused a dominant position... by imposing 'unreasonable' supply conditions for certain inputs to competing suppliers of mainframe maintenance services".

IBM offer

The Commission noted on Tuesday that IBM did not agree with the preliminary assessment, but had still decided to make an offer to allay the regulators' concern.

I commend IBM's readiness to address our concerns about fair competition in the market for large computers, which are crucial for the functioning of today's economy.
–  Joaquín Almunia, competition commissioner

As part of the offer, IBM has "put in place certain System z parts-ordering procedures", the company said in a statement. It added that it "looks forward to that providing the basis for the final resolution".

The Commission is inviting comment on IBM's commitment from interested parties, to be received by 19 October.

"I commend IBM's readiness to address our concerns about fair competition in the market for large computers, which are crucial for the functioning of today's economy," competition commissioner Joaquín Almunia said in the Commission statement.

The maintenance services investigation was launched alongside a second antitrust probe, into IBM's software bundling. That proceeding was prompted by complaints from emulator vendors T3, Turbo Hercules and Neon Enterprise Software. The companies claimed IBM had unfairly tied sales of its mainframe operating system to its System z series mainframe hardware, potentially shutting out other mainframe makers.

On Friday, the regulators said they have decided to close that proceeding after an "in-depth" investigation. The three vendors have withdrawn their complaints, it noted.

IBM, which saw a 24-percent drop in System z mainframe sales in the most recent quarter, welcomed the decision to halt the second probe. "IBM appreciates the Commission's work in concluding these cases," it said.

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