T3 files antitrust complaint against IBM in Europe

Update at 9:12 a.m. PST, with comment from IBM.

T3 Technologies filed a complaint against IBM with European antitrust regulators on Tuesday, alleging that Big Blue is blocking competition by tying its operating system with its mainframe hardware.

T3, a maker of IBM-compatible mainframes for small to midsize companies, is asking the European Commission to investigate IBM's market pricing and alleged effort to eliminate competition by withholding its patent licenses for its mainframe operating system and certain intellectual property.

"Since November 2006, we have not been able to sell any of our hardware. No rational buyer would buy any hardware without software," said Steven Friedman, T3's president.

T3 currently offers maintenance and support for its existing IBM-compatible mainframe customers and integration services.

IBM, in a statement, contends there is no violation of antitrust laws:

IBM has not seen T3's alleged EU complaint. Nonetheless, 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. IBM has spent great time and expense developing its technology and will defend its intellectual property rights vigorously.

T3, a small, privately held mainframe company in Florida, alleges, however, that IBM is engaging in behavior that previously had been barred under the consent degree that the Department of Justice began to phase out in 1997 over a five-year period.

T3 began marketing its IBM-compatible tServer mainframe line in 2000, using software from Fundamental Software that was based on an IBM patent license.

But in 2005, T3 signed an agreement with Platform Solutions Inc. (PSI), which would enable the small mainframe maker to create a more robust mainframe system, Liberty, that would put it in further competition with IBM, Friedman said.

The following year, T3 was hit with a one-two punch, as it shipped Liberty. IBM said it would not license its operating system to PSI or to Fundamental Software any longer.

PSI and T3 filed a lawsuit against IBM in the U.S. District Court for the Southern District of New York in late 2007, alleging Big Blue violated the nation's antitrust laws and engaged in unfair competition.

PSI, however, was acquired by IBM in July. T3 is continuing with the lawsuit, which is scheduled to go to trial in mid-summer.

Since 2006, T3 has laid off 80 percent of its workforce in the U.S. and Europe, as its revenue has dropped by a similar proportion, Friedman said.

"IBM has left the industry with one (mainframe) vendor. They have successfully foreclosed all competition in this industry," Friedman said.

With the European Commission having recently shown it will pursue tying cases, such as in the Microsoft and Media Player case and now its recent objection to tying Microsoft's Internet Explorer browser with Windows, Friedman said he is optimistic the European Commission will investigate its complaint.

[sanenazok]

How could they afford to sue if they haven't sold anything since 2006? Who's fronting this outfit? And in EU courts of all places.

[alegr]

Pulling Opera on IBM?

[timber2005]

I'd usually not "reply" with a seperate comment but alegr is on the right track, wrong finger.

Imagine if this goes through. It won't be IBM thats in deep, it will be APPLE. Tying OS with hardware.

Prediction: EU go against IBM for that reason.

[catbutt5]

You're forgetting that Apple doesn't prevent you from either selling your old Mac or acquiring a new version of the OS or even a different OS to put on the hardware after it's sold.

[zboot]

Catbutts comment is inaccurate. Have, the comparison is that there is a company that sells Mac clones but Apple refuses to license them the Mac OS. They ave effectively locked out of doing business because nobody will buy hardware w/o "an associated software package. These are not personal machines where there exist open source or otherwise SW that you (an put on them and run at your own risk. These are business machines and there are significant costs involved when you attempt such a "risky" maneuver.