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Thursday, October 08, 2009

IBM Investigated for Mainframe Business - Journal

FOXBusiness

The Justice Department is investigating claims that IBM illegally monopolized the mainframe computer market, the Wall Street Journal reported Thursday.

The investigation is focused on allegations that IBM (IBM) used its dominant position as the world's largest producer of mainframe computers to keep competitors from developing or licensing software for the machines, the Journal said.

For decades, IBM was the world's largest producer of mainframes, large computers that often cost $1 million or more and are used by big corporations or government agencies to store and process data. The company at one point controlled 70% of the mainframe market, and it's estimated the business makes up a quarter of the company's revenues, the Journal said.

According to the complaint, the allegations stem from IBM's decision not to license its operating system, called z/OS, to customers of Platform Solutions Inc., a company that made cheaper but IBM-compatible mainframes. Platform alleged that IBM was unlawfully "tying" its software to its mainframe hardware and requiring customers to purchase both.

Platform was purchased by IBM last year.

The antitrust suit might be an indication of the willingness of the Obama administration to investigate antitrust complains compared with the Bush administration, the Journal said.

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