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EU launches antitrust probe against IBM

The European Union said Monday that it has launched an antitrust probe against IBM Corp. related to allegations that the technology giant abused its dominant position in the mainframe computer market.

IBM denied the charges, arguing that they are being driven by some of its rivals, led by Microsoft Corp. The European Commission, the EU’s executive arm, unveiled the investigation, which was partly based on complaints filed by software vendors T3 and TurboHercules.

However, the launching of the probe “does not imply that the commission has proof of infringements,” the body said in a statement.

IBM countered in a release that the accusations “are being driven by some of IBM’s largest competitors — led by Microsoft — who want to further cement the dominance of Wintel servers by attempting to mimic aspects of IBM mainframes without making the substantial investments IBM has made and continues to make.”

Wintel servers refer to business computers based on Microsoft’s Windows operations system and Intel Corp.'s microprocessors. Microsoft could not immediately be reached for comment.

The commission said IBM allegedly “engaged in illegal tying of its mainframe hardware products to its dominant mainframe operating system.”

“The complaints contend that the tying shuts out providers of emulation technology which could enable the users to run critical applications on non-IBM hardware,” the commission said.

Mainframe computers are powerful systems used to operate the data centers of large institutions, including corporations and governments. The commission noted that “the vast majority of corporate data worldwide resides on mainframes.”

IBM is also accused of trying to shut out potential competitors in the maintenance services market for mainframe systems “by restricting or delaying access to spare parts for which IBM is the only source.”

However, Armonk, N.Y.-based IBM said the dispute is based on the company’s bid to protect its intellectual property.

“Certain IBM competitors, which have been unable to win in the marketplace through investments in fundamental innovations, now want regulators to create for them a market position that they have not earned,” IBM said in a statement.

IBM said it plans to “cooperate fully with any inquiries from the European Union.”

Shares of IBM fell 4 cents to $128.34.

Pimentel writes for MarketWatch.com/McClatchy.


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