EU antitrust probe of IBM

IBM mainframe computerEuopean Union regulators launched two antitrust investigations against IBM, the world’s biggest provider of computer services, for allegedly abusing its dominant position on the mainframe computer market.  IBM says it’s cooperating with the EU probe and that it suspects the complaint is being driven by its largest competitors, led by Microsoft.  Law Professor Keith Hylton, an authority on antitrust law, notes that the allegations revolve around IBM trying to tie its operating system to its mainframes, and to tie its own service to its mainframes.  IBM, he said, could defend itself saying it is protecting itself by limiting consumers from using inferior services or to bettter reap the returns from innovation.

“Both explanations have been viewed with suspicion as defenses in American law, and probably have even less chance of success under European law.  Still, they are reasons that IBM’s ‘tying’ strategies may be pro-competitive and beneficial to consumers in the long term.”

Contact Keith Hylton, 617-353-8959, knhylton@bu.edu

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