EC launches two antitrust probes into IBM

The European Commission has launched two separate antitrust probes into IBM over allegations of illegal mainframe marketing practices.
 
The Commission alleges that IBM illegally tied sales of mainframe hardware with its mainframe operating system, and of discriminatory practices regarding maintenance services.
 
Emulator software vendors T3 and Turbo Hercules set the ball rolling in the mainframe investigations, the EC said, with the firms claiming that IBM's tying practices have prevented them from enabling IBM's OS to run on non-IBM hardware.
 
The second investigation has been initiated at the EC's own discretion.
 
It will examine whether IBM is keeping potential competitors out of the market for mainframe maintenance services by restricting access to spare parts that can currently only be sourced from IBM.
 
IBM has denied any wrongdoing, stating that it was just defending its intellectual property rights with its practices.
 
The company went on to state that the investigation is the cause of spurious complaints from Microsoft “and its satellite companies,” referring to the fact that Microsoft has a stake in T3, FT.com said
 
 
But T3 has denied that Microsoft had any involvement with the complaint it lodged to Brussels.
 
Microsoft had also owned a stake in PSI, which had submitted a similar complaint to the EC, but withdrew it after it agreed to be acquired by IBM.
 
The market for mainframe hardware and operating systems was €8.5 billion last year, of which €3 billion came from the European Economic Area, the Commission said.
 
While mainframes are being superseded by cloud computing, they still contain “the vast majority of corporate data worldwide,” it added.
 
Financial research firm Sanford C Bernstein told FT.com that IBM likely earns up to 20% of its revenue and 40% of its operating profit from the mainframe market.

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