CCIA Reaction To Potential IBM, Sun Microsystems Merger
3/18/2009
Washington – According to various news reports, IBM is in merger talks with
Sun Microsystems Inc. These high tech giants have several overlapping
products and services and are key players in numerous markets, including
the critical server market, and a merger will impact the key area of cloud
computing. The Computer & Communications Industry Association was founded
more than 35 years ago by companies trying to fight anticompetitive
behavior by mega companies with too much market power. The following
statement can be attributed to CCIA President & CEO Ed Black:
“If this merger is announced, it will require careful, extensive review by
antitrust authorities because of the wide range of tech products both
companies now produce. IBM and Sun have been fierce competitors for years.
A merger would eliminate a key competitor, which affects choice and prices
down the line on numerous IT products.”
“In these economic times we need innovation. A competitive marketplace
boosts innovation. We do not need “companies too big to fail” at the center
of our critical digital infrastructure.
“ IBM’s continued monopoly dominance of the high end computer market is a
key factor and starting point in any analysis of this proposed deal. As
we evaluate the complex aspects of what would be IBM’s largest acquisition
ever, we would look at all the relevant factors of the deal, while
remembering that IBM has been under federal supervision for decades because
of anticompetitive behavior. This potential merger has the attention of
many tech companies and others who might wind up with fewer choices in
computer services. We expect it will be scrutinized by all who use tech
products, and all who care about a competitive, innovative business
environment and its role in the economy.
“IBM is currently under investigation because of its monopoly in the
mainframe market. Acquiring a more dominant position in related areas
including servers would require a great deal of scrutiny and time to
review. A merger of IBM and Sun would impact the server market where both
companies hold a dominant market share in servers running on the Unix
operating system. It also would have implications in the storage,
middleware, java and database sectors. The impact of such a deal on
competition and the price consumers pay for tech products would be
far-reaching and deserves careful review by antitrust authorities.”
IBM is currently facing an antitrust investigation in Europe over its
mainframe business practices. Last year it bought PSI Networks to end
several lawsuits involving its actions involving PSI, although the
investigation by European antitrust authorities is ongoing. Big Blue also
faces an antitrust investigation by the European Union after one of its
last standing competitors in the mainframe market, T3, filed a formal
antitrust complaint against IBM in January.
Contact:
Heather Greenfield
202-783-0070 ext 113
Ed Black
202-783-0070 ext 110
