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EU Launches Antitrust Investigation Against IBM

Posted by Soulskill on from the always-bet-on-blue dept.

FlorianMueller writes "The European Commission announced today that it has launched two parallel antitrust investigations into IBM's mainframe practices, following complaints lodged by T3 Technologies last year and French open source startup TurboHercules in March. EU regulators suspect an abuse of a dominant position and illegal tying of IBM's mainframe hardware to its proprietary mainframe operating system z/OS. There's even the possibility of a third case based on a complaint filed very recently by NEON, and the DoJ is also looking into this matter. IBM now finds itself in a situation previously experienced by Microsoft and Intel. This may also affect IBM's credibility when lobbying in the EU for open standards." Reader coondoggie points out a response from IBM saying that the accusations are being driven by Microsoft and other competitors.

8 of 135 comments (clear)

  1. Imagine that! by vvaduva · · Score: 4, Funny

    Wow...a company tying it's software to the hardware they manufactured! Holy crap...who could have imagined!?!

    1. Re:Imagine that! by FlorianMueller · · Score: 4, Informative

      Wow...a company tying it's software to the hardware they manufactured! Holy crap...who could have imagined!?!

      IBM isn't the only company doing that. But they have a de facto monopoly on mainframes and that's why there's an antitrust issue. It takes a market position that is at least dominant (IBM is even superdominant on mainframes) AND anticompetitive behavior. One of the two isn't enough to make a legal case. I discussed the question of market dominance versus significance in this recent blog posting.

    2. Re:Imagine that! by AdmiralXyz · · Score: 4, Insightful

      Thank you. For the /.ers who are (still) unclear about this, having a monopoly is not illegal. IBM is basically the only company left selling mainframes; it's not their fault if everyone else chose to leave what is an incredibly high-risk market that requires oodles of investment. Similarly, tying your hardware to your software is not illegal in itself either (so you can stop clamoring for antitrust litigation against Apple).

      What's illegal is abusing a monopoly, you have to have both a dominant market position and anticompetitive activity like software/hardware lock-in before the government has a case. Which I think they do, in this instance.

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    3. Re:Imagine that! by bws111 · · Score: 4, Informative

      IBM stopped bundling hardware and software in 1969. z/OS is a separate product from the hardware. You do not get a copy of z/OS when you buy a zSeries machine. You can run any OS on it you wish. That includes z/OS, Linux, z/VM, z/VSE, and OpenSolaris. However, if you want to run z/OS, then you DO need a zSeries machine, as that is the only way it is licensed. TH would like IBM to license z/OS to run on their emulator. But, there is a problem - IBM believes the TH emulator infringes on over 100 of it's hardware and architecture patents, and therefore will not license z/OS to run on it.

  2. Groklaw by just_another_sean · · Score: 4, Informative

    Here is some facts and opinion from Groklaw, at least on the TurboHercules part.

    Groklaw
    Digging a Little Deeper into TurboHercules/IBM - OpenMainframe.org and Microsoft

    Despite the fact that PJ probably has a few blinders at work when opining on IBM I believe this to be relevant considering
    Florian's seemingly diametrically opposed (to PJ's that is) opinions on IBM...

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    1. Re:Groklaw by poetmatt · · Score: 4, Insightful

      blinders on how? PJ is a paralegal and has no ties to IBM whatsoever.

      Florian is doing nothing but spin lately. I debunked him before on this article and if he tries this again, I'll debunk him again. We don't need his spin on slashdot.

  3. "IBM now finds itself in a situation ..." by CaptainOfSpray · · Score: 5, Informative

    "IBM now finds itself in a situation previously experienced by Microsoft and Intel."

    How fast we forgot! Or maybe it's that you young uns never knew...IBM wrote the book on fighting and defeating anti-trust actions by not winning in court, but winning in the market place. Check out what happened 1956 and 1969, and how those events made IBM stronger, not weaker.

    --
    "Cock Up Your Beaver" does not mean what you think. This sig is intended to clog filters and annoy do-gooders
  4. US centric view of the world by thbb · · Score: 4, Informative

    You're talking about US law.

    This a EU investigation, and its legal grounding is different. Among others: tying your hardware to your software *is* illegal in EU, as it constitutes a bundled sale. Also, monopolies and oligopoles are under tight surveillance, and the EU can fine them if their margins reach beyond a certain threshold. There are full teams of statisticians who study sales numbers of telcos in EU, and determine what is a "fair" margin they are entitled to make.

    This is what we call a "market-driven social economy", where we have managed to insert some of the good ideas of socialism while still relying on the market to allow some form of competition between tightly controlled corporations.