UPDATE 2-U.S. tech firm T3 complains to EU about IBM
(Adds comment from IBM)
By Bate Felix and Sarah Luehrs
BRUSSELS, Jan 20 (Reuters) - U.S. computer firm T3 Technologies Inc said on Tuesday it had filed a competition complaint with the European Commission accusing IBM of abusing its power in the mainframe computer industry.
T3 accused International Business Machines Corp (IBM.N) of preventing sales of competing mainframe hardware products by tying the sale of its operating system to its mainframe hardware, and of withholding patent licenses, Steven Friedman, president of the privately held Florida-based company, told Reuters.
A spokeswoman for IBM said the firm has not seen details of the complaint, but added that the company believed it is not violating any regulations.
"IBM is confident that it is no violation of competition laws for IBM to rightfully seek to prevent another company from violating IBM's intellectual property rights," said spokesman Tim Breuer. "IBM has spent great time and expense developing its technology and will defend its intellectual property rights vigorously."
Mainframes are computers used mainly by large organisations for critical applications -- typically bulk data processing such as census, industry and consumer statistics, and financial transaction processing.
From 1992 until 2002, T3 said it sold IBM mainframes, but later produced two alternative mainframe product lines at lower cost, which competed with IBM.
Friedman said from October 2006, IBM refused to grant licences to customers who bought T3 mainframes, rendering them useless.
"IBM simply refused to license any software to any other hardware except their own -- virtually putting us out of business," he said.
"If you own a mainframe computer today, there's only one company you can go to, and that is IBM," said Friedman.
Friedman said IBM is abusing its monopoly and now controls one hundred percent of the market.
"Imagine if Microsoft decided they were going to build hardware and they told the world ... you can only run Windows, we are not going to licence Windows to Dell, HP or any other ... it is exactly what IBM has done to us," Friedman said.
He said T3, which made about $20 million a year in turnover before 2006 and had over 600 clients in 28 different countries, 200 of them in 15 EU members states, had to layoff about 75 percent of its staff after that.
The complaint asked the European Commission, the competition watchdog of the 27-nation European Union, to bring another investigation against IBM following a similar complaint by Platform Solutions Inc in 2007.
That complaint was dropped when IBM, the world's largest technology services company, acquired Platform Solutions in July 2008. However, the Commission said it was still pursuing that investigation.
"We did take the initiative and said we would look into the mainframe sector and that inquiry is still going on," an official at the Commission said.
The Commission's provisions against abuse of dominance was central to its landmark court victory over Microsoft in September 2007 before a European Union court.
The complaint comes a week after Brussels used the same principle to charge Microsoft with anti-competitive behaviour, for bundling its browser in its operating software, and was also used for a major settlement against IBM in the 1980s. (Additional by Jim Finkle in Boston, Adrian Croft in London; editing by Simon Jessop, Richard Chang)
