IBM reaches mainframe antitrust deal with EU

(ZDNet UK) By David Meyer

On Wednesday, the European Commission said IBM will now make spare parts and technical information "swiftly available" to independent maintainers of IBM's System z mainframes, under reasonable and non-discriminatory terms. These commitments are legally binding, it noted.

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IBM Said to Settle European Union Antitrust Probe Next Week

(Bloomberg) By Aoife White

International Business Machines Corp. will reach a settlement with European Union antitrust regulators next week to end a probe into mainframe software, according to two people familiar with the matter.

The European Commission intends to accept an offer made by IBM in September to resolve a dispute over anti-competitive behaviour that may have blocked rival mainframe software makers, said the people who couldn’t be identified because the talks are private.

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IBM Remains On U.S. Antitrust Watch

(InformationWeek) By Paul McDougall

As it embarks on a campaign to bring the mainframe back to the mainstream, emboldened by the introduction this month of its most powerful data-center class machine ever, IBM is finding that regulatory authorities on both sides of the Atlantic are keeping a watchful eye on its activities in a market it's come to utterly dominate.

The company is still the subject of a Justice Department antitrust probe into its mainframe licensing policies, and EU authorities this week launched their own investigation.

The DOJ began its probe last October, and a regulatory filing by IBM this week indicated it's still active nine months later. "IBM has been notified that the U.S. Department of Justice (DOJ) is investigating possible antitrust violations by IBM, and the DOJ has requested certain information," IBM said in a second-quarter report filed Tuesday with the SEC. 

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IBM Forgets Its Past and Lands In European Union Monopoly Probes

(BNET) Wired In Blog by Erik Sherman

IBM has managed to become the subject of two simultaneous European Union antitrust investigations, as if one wouldn’t be enough. What it demonstrates is not that the EU is hungry to protect its own high tech industries — which, by the way, it is — but that even a company as smartly run as IBM can land in hot water when hubris directs it to disregard the past.

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More Trouble for IBM

(Data Center Journal) By Jeffery Clark

Coming on the heels of IBM’s as-yet unresolved contract dispute with the state of Texas is a new antitrust probe by the European Union (EU) regarding IBM’s mainframe business. Ostensibly, this probe is investigating claims that the mainframe giant has used its strength in this segment to stifle competition through closely linking its mainframe hardware and operating system and through anti-competitive practices with regard to the mainframe maintenance market.

Although the EU investigation does not mean that IBM is automatically guilty of any wrongdoing in the sight of regulators, it does signify additional bad publicity that the IT giant certainly doesn’t need, especially in light of the recent spat between the company and the state of Texas regarding an $863 million state data center consolidation project. According to an EU announcement (“Antitrust: Commission initiates formal investigations against IBM in two cases of suspected abuse of dominant market position”), the European Commission has initiated two separate investigations, but, presumably, IBM’s guilt is not a foregone conclusion: “initiation of proceedings does not imply that the Commission has proof of infringements. It only signifies that the Commission will further investigate the cases as a matter of priority.”

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IBM Needs a Good Lawyer

(Motley Fool on MSNBC) By Rich Smith 

Pity IBM. They don't get no respect -- not at home, and not abroad, either.

Nearly one year ago, we regaled you with the tale of how IBM's friends in the tech industry ("friends" of the "who needs enemies" variety) were trying to lay the tech titan low. Instigating a Justice Department investigation into alleged "tying" of mainframe computer hardware to mainframe software, the Computer & Communications Industry Association (a broad organization supporting open competition that includes such disparate companies as Advanced Micro Devices in semiconductors, Oracle in databases and Google in Internet search) aimed to force IBM to license use of its software by competitors who hawked competing, presumably cheaper, hardware.

Now the European Union -- which never met a monopoly complaint against a U.S. company that it didn't like -- is getting in on the fun. Earlier this week, we learned that the EU Competition Commission, lately the domain of the dread knight Neelie Kroes, is now leveling its lance at IBM, and sounding the charge.

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IBM Mainframe Niche Market Draws EU Regulatory Probe

(eWeek) By Wayne Rash

...But in fact, IBM could decide to do business with the makers of emulators. The reason is simple, and is a lesson that IBM learned the last time this happened. IBM makes a lot of money out of selling its operating systems. This is revenue that IBM wouldn't receive otherwise. It's unlikely to cannibalize mainframe sales because it's unlikely that buyers of an x86 server are really customers that would buy a mainframe...

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EU tech firm probes could spill over to Canada

(Toronto Sun) By Stefania Moretti, QMI Agency

It could be the beginning of the end of market dominance for giant technology firms like IBM and Apple, which have managed to monopolize their sectors for years by chaining their software to their hardware.

Earlier this week, the European Union launched two anti-trust probes against IBM. Competition regulators suspect the U.S. company of abusing its dominant position in mainframe computer markets after other software vendors complained about IBM unfairly tying its hardware to its own operating system, denying other the opportunity to compete.

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IBM's Probes Show EU Will Continue 'Tough Stance' on Technology

(Bloomberg Businessweek) By Stephanie Bodoni and Erik Larson

...The probe is the second time the EU has looked at IBM’s position in the mainframe market. The company settled an earlier case in the 1980s.

“There are some interesting parallels with the 1980s IBM settlement,” said Robert O’Donoghue, a London lawyer who specializes in EU competition law. “What will be very interesting in this case is whether IBM will fight to the bitter end or whether it thinks there’s some remedy that could be offered that would make the investigation go away.”

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(Main)framed?

(The Economist) Newsbook blog

...The [European Commission's] probe into the alleged tying of software and hardware sales has been triggered by complaints from two firms, T3 Technologies and TurboHercules, which make “emulation” software that allows important applications to run on cheap, non-IBM hardware. They say that IBM won’t allow their customers to buy or license its mainframe operating system to use in conjunction with their software. T3 has lodged an antitrust complaint in America as well as Europe.

IBM retorts that the accusations are groundless and that the firms “want regulators to create for them a market position that they have not earned” by allowing them to effectively steal its intellectual property.  It has also accused them of being “satellite proxies” of Microsoft, one of IBM’s biggest competitors, which makes software that runs on servers that compete with mainframes. And it has been telling anyone who will listen that mainframes’ share of total server sales is so paltry that its market share needs to be seen in the context of the overall server market. It looks like big iron is set to generate some pretty big fees for competition lawyers.

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EU Adds IBM to Target List

(Wall Street Journal) By Charles Forelle

BRUSSELS—Reanimating long-dormant scrutiny of International Business Machines Corp., European Union antitrust authorities said Monday they have opened formal investigations into Big Blue's conduct in the market for powerful mainframe computers.

One of the EU's probes was spurred by complaints from two small technology companies that IBM improperly blocks customers from using the mainframe's operating system without IBM's own pricey hardware. The other probe is examining whether IBM is squelching third-party providers of spare mainframe parts.

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Good for the Gander?

(The Wall Street Journal) Real Time Brussels blog by Charles Forelle

...The week’s big news is the commission’s formal probe into International Business Machines Corp., Competition Commissioner Joaquín Almunia’s biggest step yet onto the well-worn battlefield that is the high-tech industry.

IBM, we’ll all recall, was a principal antagonist of Microsoft during the software giant’s epic wars with Brussels. The IBM-backed European Committee for Interoperable Systems fought on the commission’s side during the lengthy legal process. ECIS’s efforts paid off in 2007 with a court ruling that forced Microsoft to sell a version of Windows without its media-playing application, and to provide technical information needed for rivals to work with its machines.

Now it’s time to print off a few more copies of that ruling. It’ll be used against IBM for sure.

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EC Opens Two Antitrust Investigations of IBM

(Client Server News) By Maureen O'Gara

 The European Commission said this morning that has opened not one but two formal investigations of IBM and its mainframe business on the suspicion that Big Blue has abused its dominant position...

IBM is the only mainframe maker left and as it told the UK press last week “Western civilization runs on this system.” The Commission acknowledges that the vast majority of corporate data worldwide still lives only on the mainframe. It is too expensive to move it.

The EC puts the worldwide market for mainframes last year at roughly €8.5 billion ($11 billion) and €3 billion (~$4 billion) in the European Union, but those estimates apparently just cover mainframe hardware and operating systems.

IBM’s mainframe margins are understood to be quite handsome – BusinessWeek reckons the new next-generation mainframe that IBM just announced last Thursday could have a profit margin of ~70% – and Sanford Bernstein, for one, says the mainframe contributes over 20% of IBM’s revenues and 40% of its profits all things considered: hardware, software, storage, services, financing.

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IBM comes under two anti-trust probes from the EC news

(domain-b.com)

IBM the world's largest technology company has come under two antitrust probes from the European Commission (EC) for abusing its dominance in the computer mainframe markets.

The EC today said that it had initiated formal anti-trust investigations against IBM in two separate cases of alleged infringements of EU antitrust rules related to IBM's conduct on the market for mainframe computers.

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IBM takes dim view of EU claims "being made by Microsoft and its satellite proxies"

(NetworkWorld) By Michael Cooney

IBM responded angrily to the claims behind investigations being brought by the European Union today that the company has abused its dominant market position in mainframe computers.

IBM stated it intends to cooperate fully with any inquiries from the European Union. "But let there be no confusion whatsoever: there is no merit to the claims being made by Microsoft and its satellite proxies. IBM is fully entitled to enforce its intellectual property rights and protect the investments we have made in our technologies. Competition and intellectual property laws are complementary and designed to promote competition and innovation, and IBM fully supports these policies. But IBM will not allow the fruits of its innovation and investment to be pirated by its competition through baseless allegations."

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EU Begins Antitrust Probe of IBM

(Manufacturing.net) By Robert Wielaard, Associated Press Writer

The European Union opened two antitrust investigations against IBM Corp. Monday, accusing the American technology giant of abusing its dominant position in the mainframe computer market.

One investigation stems from complaints by emulator software vendors T3 and Turbo Hercules, which accuse IBM of tying the sale of mainframe hardware to its mainframe operating system, the European Commission said.

The other, begun at the EU executive's own initiative, accuses IBM of "discriminatory behavior toward competing suppliers of mainframe maintenance services."

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IBM in EU Antitrust Probe Over Mainframes

(ServerWatch) By Andy Patrizio

IBM is facing regulatory scrutiny from the European Commission, which launched two separate antitrust investigations into Big Blue's mainframe business.

...Martin Reynolds, a research vice president with Gartner, describes an IBM loss as likely to result in "a big fine and a changing of IBM's habits."

"IBM would be compelled to give the local company access to a license," he told InternetNews.com, adding that T3 and TurboHercules could potentially argue that a customer who previously bought a mainframe could transfer the mainframe license to commodity x86 software and use that hardware to run mainframe software.

"TurboHercules have a good story," Reynolds said. "If you're government agency with these old mainframes kicking around, you can put your old software on some x86 stuff and scrap the mainframe. They've got a reasonable technology but it's difficult for them to get a license because IBM won't allow them to run [IBM] software."

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IBM targeted in two antitrust probes

(Triangle Business Journal) By Frank Vinluan

The European Union announced Monday it is investigating IBM in two separate cases of alleged antitrust activity in Big Blue’s mainframe business.

The first case was spurred by complaints from two vendors, T3 and Turbo Hercules, who claim IBM ties its mainframe hardware to its mainframe operating system. The second case comes from an investigation by EU antitrust regulators that IBM allegedly discriminates against competing suppliers of mainframe maintenance services.

The European Commission said in a statement that the complaints contend that IBM’s tying of its mainframe hardware products to its operating system shuts out providers who offer non-IBM hardware. The Commission added that it has concerns IBM may have kept competitors in mainframe maintenance out of the market by restricting or delaying access to spare parts that are only available through IBM.

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IBM hits out at Microsoft over review

(Financial Times) By Richard Waters in San Francisco and Nikki Tait in Brussels

Behind the formal complaints from small technology companies and trade associations that are often the trigger to antitrust reviews in Brussels, a ­power game is being played out between some of the industry’s leading household names.

That struggle broke out into the open on Monday as IBM accused Microsoft of orchestrating a campaign against it.

If this is the case, then Microsoft has just scored a big victory, with Europe beginning an investigation into the mainframe trade that was long the bedrock of IBM’s business, and is still one of its main pillars.

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European Commission investigating whether IBM broke antitrust laws in mainframes

(VentureBeat) By Dean Takahashi

The European Commission has opened an antitrust investigation into IBM’s actions in the mainframe computer market.

The investigation involves allegations that are well known at this point about whether IBM took actions that shut out rival mainframe software vendors and service providers. It could potentially lead to antitrust charges and fines against IBM.

Traditionally, the European Union has been tougher on American technology companies than U.S. regulators, having lodged large fines against both Microsoft and Intel. Now it is turning to big blue because of specific allegations that IBM elbowed smaller rivals out of the way by tying sales of its mainframe operating system to its mainframe hardware. in the mainframe business. The commission had received complaints from makers of third-party hardware that works with IBM’s mainframes.

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