IBM on antitrust defense in Europe
Its 1956 consent decree aimed to keep IBM from controlling its whole ecosystem. It created markets for used machines and services IBM had been keeping down. The decree remained in force until 1996.
The aim of that decree, and of the Microsoft consent decree, signed in 1994, is to keep effective monopolies from being extended by tying them to other goods and services through contracts. Such deals are at the heart of U.S. antitrust law regarding technology, where change is constant and borders are constantly shifting.
IBM still dominates in the "big iron" sphere formerly called mainframes, and now it's on the defense in Europe, where a French company now charges IBM is preventing people from running its open source mainframe emulator.
TurboHercules thinks of itself as being in the mainframe disaster recovery business, not the mainframe business. Its Hercules is a software layer that sits between the mainframe software and a commercial system like Linux or Windows, and has been around for 10 years.
By tying use of its mainframe software to IBM hardware, TurboHercules charges, IBM is preventing open source from competing. The company's complaint said it tried to do business with IBM last year, but was met by an intellectual property complaint.
The U.S. Justice Department has been investigating IBM's mainframe business since last year, but given the EU's recent $1.45 billion fine against Intel, its antitrust regulators are now feared more than their U.S. counterparts.
This case may go deeper, however. IBM has become recognized as an open source leader. You can argue that open source saved IBM, allowing it to unify product lines under Linux, offload development costs, and create new alliances.
I think of IBM's mainframe business the way I would think of a newspaper chain tied to a larger media conglomerate. The newspaper business is dying and thus milked ruthlessly for profits, which are invested in areas with faster growth.
IBM has a lot to lose if it can't maintain that cash cow. But it also has a lot of credibility in open source, credibility that could dribble away if this case goes on or expands.
So is IBM a friend or foe of open source? [poll=115]