IBM Faces DOJ Antitrust Inquiry On Mainframes

Several sources are reporting that IBM is facing an antitrust inquiry from the US Department of Justice due to a supposed refusal to issue mainframe OS licenses to competitors. "Part of CCIA's complaint stems from the tech giant's treatment of former competitor Platform Solutions. IBM had little competition in the mainframe market when Platform Solutions, early this decade, began work on servers that could mimic the behavior of more expensive IBM mainframes, CCIA said. Platform Solutions, based on past mainframe agreements between IBM and the DOJ, requested copies of IBM's OS and technical information under a licensing agreement. IBM declined to grant Platform Solutions a license and prohibited customers from transferring IBM software licenses to Platform Solutions machines, said CCIA, which has members that are potential competitors of IBM."

Comments

Here we go again

[WinterSolstice]

We spent years trying to get IBM to stop being a monopolistic and evil company, finally got them to change (a bit).
Then Ma Bell, resulting in them being broken up.

Now ATT/Bell is back to being a gigantic mega-company again, and IBM is back to the same stuff they tried against DEC and others.

The more things change...

If Slashdot were fifty years old....

[david_thornley]

If Slashdot were old enough, this would be a dupe. This is exactly what IBM was slapped down for in the 1960s. The anti-trust case left companies like Itel and Amdahl able to produce and sell IBM-compatible mainframes running IBM software.

Re:If Slashdot were fifty years old....

[SparkyOfGenius]

This is not necessarily the case. Although it is correct to say that usually a company is under no "duty" to license out its IP, there are notable exceptions. One being, if a company has licensed its IP openly in the past and made assurances of future RAND licensing and a market/ecosystem has formed around it and then when it reaches a dominant position where the entry barriers are high (i.e. "installed base opportunism") and changes it strategy in order to make exorbitant profits--then antitrust might recognize a duty to deal.

In the mainframe space, IBM was under a consent decree (settlement with government) and government scrutiny until 2001, where it was deemed that due to changes in the IT world - the decree was no longer necessary b/c IBM faced new sources of competition. This competition never materialized--and in fact the few competitors who were in the market exited because they were no longer guaranteed interface specifications and licensing necessary to make compatible machines.

From the customer side, the vast majority of the world's corporate and public sector data is locked-into the mainframe--especially areas that require high-levels of batch processing--financial institutions, airlines, credit card companies, health care, social security administration, etc. It is incredibly hard to "migrate" off of a mainframe--sometimes impossible. This is why IBM can charge so much to legacy users--a gig of RAM on a mainframe costs almost $6,000--a little bit of a markup. In fact, mainframes apparently account for nearly a 1/4 of IBM's nearly $100 million annual revenue. The world is so tied to mainframes behind the scenes--IBM has even said on its own website: "It is no exaggeration to say that, without the Internet, many businesses would suffer but, without the IBM mainframe, the global financial system would collapse."

The companies at which IBM has allegedly taken this action against have all focused on helping customers migrate off the mainframe and allow this data to move to other, less expensive machines. It would definitely make business sense for IBM to do that--however, I also believe it is a likely violation of antitrust law--both here and in Europe.

Bad news for Apple?

[Burdell]

How is this different from what Apple does with OS X and Macs?

Re:Bad news for Apple?

[alop]

Technically, anything proprietary is monopolistic...

If you're the ONLY one making [mainframes/Macintosh/widget Z], wouldn't that make you an automatic monopoly?

If someone wants to make a work-a-like/compatible product to your proprietary product, are you bound to oblige?

Re:Bad news for Apple?

[h2okies]

IBM is a monopoly. There are no other competitors in the mainframe business. IBM just doesnt make the OS they make the hardware as well. They essentially broke every other competitors back by either pricing them out or buying them up. They became the defacto big iron supplier in the world and abused said position every time anyone came out with better faster or cheaper hardware than them, history has repeated itself. This position allows them to dictate the market place and pretty much kill off invention and improvement. The pc market place is full of competitors duking it out to make a buck and gain your business as a hardware supplier. The mainframe you have a choice for both the OS and hardware it is IBM or ...

In other news...

[vrmlguy]

NASA announced plans to land a man on the moon by the end of the decade, the president announced that he was not a crook, and thousands of hippies descended upon Woodstock for 3 days of peace & music,

They're not the only ones...

[jasen666]

Why is this different from Apple not licensing use of it's OS on non-Apple computers?
Wasn't Irix only licensed to run on SGI machines?
HP-UX? Others?