EC accuses IBM of mainframe market abuse

IBM believes the allegations are driven by its rivals

The European Commission (EC) has initiated formal anti-trust investigations against IBM concerning two cases of alleged infringements of European Union rules relating to the abuse of the firm's dominant mainframe market position.

The first case follows complaints by emulator software vendor T3 Technologies last year and French open-source startup TurboHercules this March, and focuses on IBM's tying of mainframe hardware to its mainframe operating system.

IBM's actions shut out providers of emulation technology, the two companies contend, which could enable users to run critical applications on non-IBM hardware.

The second is an investigation by the EC of IBM's alleged discriminatory behaviour towards competing suppliers of mainframe maintenance services. This case alleges that IBM intentionally sought to restrict or delay access to spare parts for which IBM is the only source in order to lock potential competitors out of the market.

Figures published by the EC last year valued the worldwide mainframe hardware and operating system market at around €8.5bn (£7.1bn) and €3bn (£2.5bn) in the European Economic Area.

The announcement comes just days after IBM announced its next major z series mainframe launch, and reported a big drop in its mainframe sales in the region.

IBM has hit back against the EC cases with its own figures, which the company said contradict the EC's assertion that it holds a position of market dominance.

Quoting IDC figures, IBM pointed out in a statement that mainframe server sales today are a tiny fraction of worldwide servers, representing just 0.02 per cent of servers shipped and less than 10 per cent of total server revenues in 2009.

IBM added that first-quarter 2010 server share reports from IDC and Gartner show this trend continuing, with mainframe server revenue declining and Intel-based servers growing.