Computer
The Computer and Communications Industry Association sent a report to the Justice Department in September, saying IBM is exploiting its monopoly in operating systems for mainframes, said Ed Black, the groups chief executive officer. Some of the organizations members, including IBM rivals, have been contacted by the Justice Department, he said.
IBM, the worlds largest computer-services company, began developing mainframe computers in the 1940s and 50s and is now among the few companies offering the systems. While mainframes were once the dominant form of computers, theyve been eclipsed by personal computers and servers. Even so, businesses still rely on mainframes and IBM has stifled competition, the CCIA said.
“Our goal was to educate the DOJ about why we think theres a monopoly maintenance case,” Black said. “Our hope was they would open an investigation.”
The market for mainframes and high-end servers — machines costing more than $500,000 — will total $8.5 billion this year, according to Framingham, Massachusetts-based research firm IDC. That accounts for about a fifth of the $44.5 billion server market, which IBM leads.
T3s Claims
T3 Technologies Inc., a company that builds mainframe computers and is mentioned in the CCIAs report, complained to the European Commission this year that IBM shut competitors out of the market. The company also filed an antitrust claim against IBM in the U.S., according to a January statement. IBM said yesterday that the U.S. claim was dismissed last week. T3, based in Tampa, Florida, has appealed the ruling.
“We understand the Department of Justice has asked T3 for documents from the litigation,” Edward Barbini, an IBM spokesman, said yesterday in a statement. “IBM intends to cooperate with any inquiries from the Department of Justice. We continue to believe there is no merit to T3s claims, and that IBM is fully entitled to enforce our intellectual property rights and protect the investments that we have made in our technologies.”
Gina Talamona, a spokeswoman for the Justice Department, didnt immediately return a call seeking comment. A call placed after working hours to Steven Friedman, president of T3 Technologies, wasnt immediately returned.
IBM, based in Armonk, New York, rose $1.43 to $122.78 yesterday in New York Stock Exchange composite trading. The shares have advanced 46 percent this year.
Companies Complaints
The CCIA released a summary of its report, which includes complaints by companies that say they have been harmed by IBMs behavior, Black said. The groups members include Google Inc., EBay Inc., Microsoft Corp. and Oracle Corp.
The government did issue a consent decree in 1956 that cited IBM for anticompetitive practices. The decree ended in the 1990s.
“All the competitors in the mainframe space really died out about a decade ago,” said Rob Enderle, an analyst with Enderle Group in San Jose, California. “The oversight would have gone away when the consent decree was lifted. IBM is the last one standing, so they clearly are as much a monopoly as they were before.”