IBM To Be Hit With Another Antitrust Complaint

BY CCIA Staff
August 11, 2008

T3 Technologies formally announced today it had retained counsel to file an antitrust complaint against IBM in Europe. T3 is a small mainframe supplier, which bills itself on its website as an alternative to being bound by IBM.

The European Commission is already investigating an antitrust complaint filed against IBM by Platform Solutions, Inc., which was a small but significant competitor to IBM. The EC investigation was moving forward despite an announcement last month that IBM was acquiring PSI.

While this complaint will reportedly focus on the abuse by IBM in the European market, IBM’s misconduct is clearly taking place on a global scale, according to a trade association that keeps tabs on antitrust issues. The Computer & Communications Industry Association says these complaints about IBM’s abusive misconduct should raise concerns for competition authorities throughout the world about whether IBM has gone back to its anticompetitive practices.

“T3’s announcement today, a month after the PSI buyout by IBM, adds credence the evidence that competition in this critical market is being stifled and would-be competitors have few other options to seek relief,” said CCIA President and CEO Ed Black. “Authorities need to look at what is happening and step in before it’s too late. The cost to consumers, to the economy and the security risk of having 90 percent of the mainframe market controlled by one company is too high.”

“Unfortunately, U.S. antitrust authorities have been AWOL with regard to many competition and antitrust matters for the last 7 years. The seriousness of this complaint can be partly measured by the caliber of counsel retained. As CCIA learned it is very important to have top quality representation in the EU, and T3 seems to appreciate that reality,” Black said.

IBM had been under a consent decree in earlier decades in the United States as part of an attempt by the Justice Department to curb anticompetitive actions. But since being released from the decree by the Bush administration several years ago, IBM has stopped licensing patents needed so that other companies’ hardware can communicate with IBM’s operating system. It would be too expensive to recreate data residing on mainframes that work with IBM’s OS, so it essentially makes it impossible for companies like PSI and T3 to compete unless IBM licenses these patents.

The reason this action could warrant attention from antitrust authorities is that antitrust law forbids a monopolist from tying the purchase of one product to that of another distinct product.

Both T3 ad PSI already have filed civil lawsuits against IBM in the United States.

“However, it is time for U.S. authorities to get back in the business of protecting U.S. consumers and innovative challenger companies, as the EU has been doing for some time now,” Black said.

Related Articles

CCIA Responds to Public Consultation on EU Proposal for a New Competition Tool

Sep 8, 2020

Brussels, BELGIUM –The Computer & Communications Industry Association offered comments on the European Commission’s public consultation on the forthcoming proposals for a new complementary tool to strengthen competition enforcement (“NCT”) today. The consultation questions cover a wide range of issues around perceived gaps in the current EU competition rules, particularly those related to what are…

CCIA Expresses Disappointment In Flawed 9th Circuit Qualcomm Decision

Aug 11, 2020

Washington — The 9th Circuit today overturned a district court decision by Judge Lucy Koh, holding that Qualcomm had not violated the antitrust laws by refusing to license competitors in violation of its contractual obligation to do so, by refusing to sell chips unless the customer first took a patent license, and by engaging in…

CCIA Reacts To UK Competition and Market Authority’s Final Report On Online Platforms And Digital Advertising

Jul 1, 2020

Brussels, BELGIUM — The UK Competition and Markets Authority today published its final report on online platforms and digital advertising. The CMA’s recommendations would grant far-reaching powers to a new digital regulator to impose company-specific regulations, force product design changes, redistribute assets, and order the breakup of platforms. The Computer & Communications Industry Association encourages…