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IBM offers concession in EU antitrust case

Associated Press
Sep 21, 2011 at 10:36am IST

Brussels: US computer maker IBM Corp. on Tuesday offered to make it easier for competitors to provide maintenance services for its mainframe computers, a concession to get European regulators to close an antitrust probe. The European Commission, the European Union's competition watchdog, opened two investigations into whether IBM was abusing its dominant position in the market for mainframe computers in July 2010. One of the probes focused on the company's profitable maintenance services.

A second investigation, which the Commission closed Tuesday, was examining whether IBM was unfairly tying its mainframe hardware with its operating system. Mainframes are powerful computers that are used mostly by big companies and governments. "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 Joaquin Almunia said in a statement.

The Commission said it informed IBM in August that its preliminary assessment showed that IBM "may have imposed unreasonable conditions for supplying competing mainframe maintenance service providers." IBM, according to a notice published in the EU's official journal, said it was offering the concessions to the EU and competitors even though it didn't agree with the Commission's initial assessment of a potential abuse of dominance.

IBM offers concession in EU antitrust case

The European Commission opened two investigations into whether IBM was abusing its dominant position in the market for mainframe computers.

The concessions include a commitment by IBM to make spare parts and technical information more easily available to other mainframe maintainers over the next five years. In a statement, IBM said it welcomed the decision to close the second investigation and "the proposed resolution of the Commission's investigation of certain IBM mainframe maintenance practices."

The Commission is now asking IBM's competitors and customers to comment on the commitments to decide whether they are sufficient. Mainframe sales make up a small portion of IBM's revenue, but the company has been making a lot of money selling software and services linked to the hardware it produces.

The closing of the probe into whether IBM was unlawfully tying its mainframe hardware with its operating system will come as a relief to the 100-year-old company. That investigation was triggered by complaints from emulator software vendors T3 and Turbo Hercules, which were later joined by Neon Enterprise Software. The Commission said Tuesday that it closed that case following an in-depth investigation and that the complaints had been withdrawn.

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