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September 20, 2011

European Commission Close Anti-Trust Case as IBM Makes Concessions

By Ashok Bindra
TMCnet Contributor

On Tuesday, U.S. mainframe computer maker IBM (News - Alert) Corp. made some concessions for European competitors. The computer giant offered to make it easier for competitors to provide maintenance services for its mainframe computers, according to HuffingtonPost.com, an Internet news site. As a result, European regulators have decided to close the antitrust probe against IBM.

Last July, the European Union’s (EU) competition watchdog European Commission opened two investigations into whether IBM was abusing its dominant position in the market for mainframe computers. As per HuffingtonPost.com report, one of the probes focused on the company's profitable maintenance services.

A second investigation by the European Commission was investigating if IBM was unfairly tying its mainframe hardware with its operating system. It was closed on Tuesday, wrote HuffingtonPost.com

The powerful mainframes are primarily used by big companies and governments. In a statement, Competition Commissioner Joaquin Almunia said, "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." The Commissioner said he informed IBM in August that its preliminary assessment showed that IBM "May have imposed unreasonable conditions for supplying competing mainframe maintenance service providers."

According to a notice published in the EU's official journal, IBM 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.

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. Likewise, in another 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," wrote HuffintonPost.com

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Meanwhile, to decide whether IBM actions are sufficient, the European Commission is now asking IBM's competitors and customers to comment on IBM commitments, as per the report.

Although, mainframe computer sales are only a small part of IBM's revenue, the company has been making lot of money by selling software and services linked to the hardware it produces, wrote HuffintonPost.com.

Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves