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IBM offered to give technical information and certain spare parts to other companies that maintain IBM's mainframe hardware and software

It seems as if the European Union (EU) is making a sport out of probing tech companies and charging them billions in fines. For instance, the EU slammed Microsoft with a 1.4 billion fine back in 2008 for violating antitrust laws. The EU has repeatedly attacked the company before and after that. In addition, the EU announced last week that it is still investigating Google's search dominance, saying that the search giant may have abused competitors.

International Business Machines Corp. (IBM) was thrown into two EU antitrust investigations last July, where competing suppliers of mainframe maintenance services accused IBM of "discriminatory behavior" in refusing to supply such inputs required for maintenance. 

The second investigation, which examined whether 
IBM was unfairly tying its mainframe hardware with its operating system, has recently been closed.

A preliminary assessment for the first investigation by the EU found that IBM's procedures "may amount to a constructive refusal to supply these inputs." The EU's executive Commission added, "IBM does not agree with the Commission's preliminary assessment. It has nevertheless offered meet the Commission's competition concerns." 

IBM's offering of concessions could settle the EU's investigation and allow it to dodge any fines or antitrust infringement findings. 

IBM offered to give technical information and certain spare parts to other companies that maintain IBM's mainframe hardware and software under specific, non-discriminatory terms, according to Reuters.

The concessions would last for five years, and now, the EU says third party companies have one month to discuss the proposals. If the proposals are accepted, IBM will not be fined. But if the EU finds that IBM committed antitrust infringement, it may have to pay fines of up to 10 percent of global revenues. 

"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," said Joaquin Almunia, EU competition commissioner.

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RE: At first I wondered why the UK wasn't a part of EU
By tng on 9/20/2011 11:38:02 AM , Rating: 2
Yeah, sometimes we here in the US don't give the Brits enough credit I think.

So another large US company sued for "anti-trust" by the EU...

They do realize that if you buy a mainframe from IBM that IBM can restrict who maintains, has information and parts for those systems, don't they? This is standard in my business, for two reasons, 1) Service income is lucrative and 2) Having poorly or untrained personnel working on your branded systems can give you a black eye if the maintenance is not done properly (even if it was a third party that did the work).

IBM should not have to give anything to competitors, period.

RE: At first I wondered why the UK wasn't a part of EU
By icrf on 9/20/2011 11:50:12 AM , Rating: 2
I thought anti-trust only dealt with monopolies. Are they seriously implying that you can't buy a mainframe from anyone buy IBM? Otherwise, every piece of consumer hardware needs a full tear-down spec sheet to help the third party maintenance workers of the EU. I mean everything from Apple iPods to Honda Accords. The manufacturers shouldn't have a monopoly on repair, should they?

By silverblue on 9/20/2011 12:07:55 PM , Rating: 2
Well, the European Court thought that Google was a browser... ;) The only correct decision that they've made of this type was the Intel one, though the "10% of global revenues" bit obviously fell into the bin in that instance (plus it doesn't serve to help the victims of said behaviour in either case - if IBM were fined 10% of their global revenues, it wouldn't go to these competitors, would it?).

To be honest, the European Court is like a bad football referee, the only consistency being their ability to make bad decisions. It's like giving a string of penalty kicks when a foul was committed 6 yards outside the box. No wonder all us spectators are finding it somewhat bewildering.

By jhb116 on 9/20/2011 12:26:58 PM , Rating: 2
Excellent point - I didn't see any figures about how dominant IBM is which is a really good point for whether this is legit.

The other side of this coin is what about Apple - they don't allow any access to any of their products and they have dominant positions in a couple of different markets....

By tng on 9/20/2011 12:50:05 PM , Rating: 2
It is not about buying the mainframe from IBM, it is about who can work on them after they go down.

My opinion is that after the warranty period is up, the customer has the right to have anybody they choose do maintenance on it. That does not translate to IBM has to sell proprietary parts, or information to those people.

IBM has an image to protect in this regard. Let one customer complain about how their IBM Model XXX mainframe is junk because the guy working (who isn't an IBM employee) can't fix it and typically IBM takes the heat, not the service company.

"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes

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