It used to be it was the tech companies that were “innovative and aggressive.” But these days that’s how experts describe the Justice Department antitrust investigators. Their newest target is IBM.
WSJ: The Justice Department is investigating allegations that International Business Machines Corp. has monopolized the market for mainframe computers, broadening Washington’s search for anti-competitive behaviour in the technology industry…
The Armonk, N.Y., giant has long held a near-monopoly position in mainframes, which are large computers that can cost $1 million or more and are designed to run accounting software anddatabases. For decades, the company operated under terms of a 1956 consent decree with the government that required it to licence mainframe technology to competitors.
The final terms of that decree were phased out in 2001. After that, the CCIA alleges IBM began to tighten its grip on the market by not allowing its newest software to be used on competitors’ machines. Some analysts calculate that as much as a quarter of IBM’s $104 billion in annual revenue stems from mainframes, despite the company’s shift towards computer services and consulting.
The government’s investigation comes after IBM has successfully batted away civil litigation accusing it of anti-competitive behaviour, by purchasing one complaining business and defeating another case in court last week.
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This investigation comes on the heels of probes into the Google books deal and Intel.
Top antitrust cop Christine Varney clearly was not kidding when she said that review of anti-competitive behaviour would be stepped up in the Obama administration.
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