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EU Launches Antitrust Probe into IBM

IBM might have launched the PC revolution back in the dark ages by sparking an industry of “IBM compatible” personal computers, but the company hasn’t been a real presence in the PC market ever since it sold its ThinkPad business to Lenovo — which that company has turned into a serious enterprise. However, that doesn’t mean IBM is out of the computing biz: The company is well known for its server products and for its big-iron mainframe systems—and that’s where it may not find itself in some legal trouble. The European Commission is launching two formal antitrust investigations looking into whether IBM abused its dominant position in the mainframe computer market.

The first case involves allegations from emulator software developers T3 and Turbo Hercules that IBM is illegally tying its mainframe hardware to its own operating system, excluding emulator products that would enable the systems to run applications designed for different types of systems. Emulators are often used on mainframes to enable new hardware to run older, legacy applications — some of which cost millions of dollars to license or develop — as well as smooth conversion to new systems.

The second antitrust probe is being launched by the European Commission itself into whether IBM has engaged in anticompetitive practices in the market for third-party mainframe maintenance services, primarily by limited or delaying access to parts and components that can only be obtained from IBM.

The EC emphasizes that, at this time, it has no proof of any infringements; however, it intends to give the cases priority treatment.

IBM denies any wrongdoing and says it plans to cooperate fully with the investigations. In a slightly unusual move, IBM also claimed in a statement that Turbo Hercules’ and T3’s allegations were without merit, and the companies were primarily acting as proxies for IBM competitors like Microsoft.

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