EC to Inverstigate IBM's Dominant Market Position

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Tuesday, July 27, 2010

EC to Inverstigate IBM's Dominant Market Position

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The European Commission has decided to initiate formal antitrust investigations against IBM in two separate cases of alleged infringements of EU antitrust rules related to the abuse of a dominant market position.

Both cases are related to IBM's conduct on the market for mainframe computers. The first case follows complaints by emulator software vendors T3 and Turbo Hercules, and focuses on IBM's alleged tying of mainframe hardware to its mainframe operating system. The second is an investigation begun on the Commission's own initiative of IBM's alleged discriminatory behaviour towards competing suppliers of mainframe maintenance services.

Mainframes are powerful computers which are used by many large companies and government institutions worldwide to store and process critical business information.

IBM is alleged to have engaged in illegal tying of its mainframe hardware products to its dominant mainframe operating system. The complaints contend that the tying shuts out providers of emulation technology which could enable the users to run critical applications on non-IBM hardware.

In addition, the Commission has concerns that IBM may have engaged in anti-competitive practices with a view to foreclosing the market for maintenance services (i.e. keeping potential competitors out of the market), in particular by restricting or delaying access to spare parts for which IBM is the only source.

The 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.