IBM offers concessions to settle EU antitrust probe

IBM offers concessions to settle EU antitrust probe

Brussels: International Business Machines Corp (IBM) has offered concessions to settle a year-long investigation by EU antitrust regulators into its business practices, which could see it ward off a possible fine.

The European Commission opened a probe into IBM in July last year after competing suppliers of mainframe maintenance services accused the US-based company of discriminatory behaviour.

A preliminary finding showed IBM’s practices “may amount to a constructive refusal to supply these inputs (required for the maintenance of IBM mainframe hardware and software)", the commission said in a statement on Tuesday.

“IBM does not agree with the commission’s preliminary assessment. It has nevertheless offered commitments... to meet the commission’s competition concerns," the EU’s executive commission said.

IBM offered to provide certain spare parts and technical information to other companies which maintain its mainframe hardware and software under reasonable and non-discriminatory terms and conditions, said the commission, which acts as competition regulator in the 27-member EU.

The company proposed appointing a manager to handle dealings with other firms. The concessions would last for five years.

EU regulators said third parties now had a month to comment on the proposals. If the proposals were accepted, IBM would not be fined. Penalties for breaking the rules allow for fines of up to 10% of global revenues.

The commission also closed a separate investigation into IBM after three small rivals withdrew their complaints that the firm had tied its mainframe hardware with its operating system.

IBM had said at the time of the allegations that Microsoft and other competitors had inspired the actions by emulator software vendor T3 Technologies Inc. and France’s TurboHercules.

The third complainant was Texas-based Neon Enterprise Software.

IBM welcomed the Commission’s decision on both issues.

“IBM has put in place certain ... parts ordering procedures, and we look forward to that providing the basis for the final resolution," the company said in a statement.