Global CIO: As IBM Preps For Justice's Probe, Who Started This Nonsense? - InformationWeek

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Government // Mobile & Wireless
05:27 PM
Bob Evans
Bob Evans

Global CIO: As IBM Preps For Justice's Probe, Who Started This Nonsense?

The bureaucrats at the Justice Dept., the European Commission, and a trade group called CCIA are looking to take from IBM what their supposed "victim" could not earn in the free market.

Who is the industry group CCIA, and why is it goading the U.S. Justice Dept. into harrassing IBM over charges of mainframe monopolization that a federal court just tossed out due to a complete lack of merit? And now that the meddlesome nannies of the EU have promised to partner-up with Justice and toss their own special brand of anti-U.S. sand into the Vaseline, what other Robin Hood-inspired and utterly misguided investigations into IBM's business will this bureaucratic trifecta dream up?

Quick backgrounder: IBM has spent the past decade rigorously selling off many of its traditional hardware businesses that it felt had become or were becoming commodities, but it has chosen to keep its mainframe business for two key reasons: first, a small but important group of IBM customers still view mainframes as strategic and valuable; and second, almost every other mainframe competitor has deserted the market while IBM has invested billions of dollars in hardware and software enhancements.

As we wrote about recently in "IBM Is Being Railroaded By Our Clueless Justice Department," Justice's antitrust division is preparing to resurrect the hard-to-fathom theory that IBM should be forced to share with any and all would-be competitors the fruits of those decade-long mainframe investments and innovations, regardless of how preposterous the claims are from those companies that, having failed to compete with IBM in the free market, are now seeking to exploit IBM through the courts.

And in the long tradition of ambulance-chasers the world over, the Justice Department, the European Commission, and a trade group called the Computer and Communications Industry Association are now looking to take from IBM what a supposed "victim" could not earn.

In this case, the allegedly aggrieved party is T3 Technologies, whose suit against IBM filed in federal district court in New York was rejected just one week before Justice decided that IBM was not going to get off so easily. As Dennis Kneale succinctly described the nuttiness in his piece called "Kneale: Obama, IBM, and How to Kill Silicon Valley":

An outfit called T3T Inc. had argued, unsuccessfully, that IBM's refusal to license its own mainframe software to let it run on copycat systems was illegal and anti-competitive. The judge flatly stated that this IBM stance "does not constitute anticompetitive conduct" under federal law. Furthermore, the judge, Lewis A. Kaplan, ruled that T3T lacked any legal standing to sue and that "its claims would fail in any event." Anti-trust laws don't restrict the right of a maker to freely choose which parties it wants to do business with, the judge said, citing a 90-year-old precedent.

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Undaunted by that unambiguous ruling, the CCIA just days later "sent a report to the Justice Department in September, saying IBM is exploiting its monopoly in operating systems for mainframes, said Ed Black, the group’s chief executive officer," according to a news story on "Some of the organization’s members, including IBM rivals, have been contacted by the Justice Department, he said."

In that same article, Black also said this:

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