By Matthew Newman
April 22 (Bloomberg) -- European Union regulators asked International Business Machines Corp. to provide details about its mainframe computer business after a competitor said IBM refused to supply data on some products, according to two people familiar with the case.
The requests may be the first step in a European Commission antitrust review of claims made by Platform Solutions Inc., said the people, who declined to be identified because the case isn't public. Platform Solutions filed a complaint that said IBM, the world's biggest mainframe maker abused EU rules ``by refusing to supply interface information'' or ``license third parties.''
IBM and Platform Solutions, another mainframe computer maker, have sued each other in the U.S. over intellectual- property and antitrust issues. Sales of IBM mainframes rose 10 percent in the first quarter, the company said April 16.
``If there's a complaint from a small competitor trying to offer an alternative to a company with a dominant position, the commission would be in a dodgy position to say `why should we bother?''' Neil Macehiter, a partner at Cambridge, England-based technology consultant Macehiter Ward-Dutton, said in an interview.
Fred McNeese, a spokesman for Armonk, New York-based IBM, declined to comment on the commission's request. He said Platform Solutions' complaints are unfounded and the company will defend its intellectual property rights in the U.S. and Europe.
Christian Reilly, Platform Solutions' senior vice president of product strategy and marketing, said the commission has asked it for information and the company is cooperating.
Gathering Information
The commission, the EU's antitrust regulator, isn't legally bound to pursue the case and could have rejected PSI's complaint. A decision not to pursue an investigation may be appealed to European courts in Luxembourg.
Commission spokesman Jonathan Todd declined to comment.
After gathering information about a complaint, the commission then decides whether to start a formal probe. Companies can be fined as much as 10 percent of annual sales for violating EU antitrust rules. The highest antitrust penalty was against Microsoft Corp., the world's largest software company, which was fined 497 million euros ($787 million) in March 2004 for abusing its dominance in the personal computer market.
U.S. companies file complaints at the commission because the costs are limited and, unlike in the U.S., the EU's information requests are made primarily to the subject of the complaint, said Damien Geradin, a lawyer at Howrey LLP in Brussels.
`Enforcement Minded'
``The investigation is essentially intrusive on the defendant,'' he said. ``The current EU case law on abuse of dominance is favorable to complainants and the commission appears to be enforcement minded.''
Privately held Platform Solutions broke licensing contracts for IBM software by selling computer systems that ``seek to imitate IBM's computers,'' IBM said in its 2006 complaint filed in federal court in New York. Platform Solutions' ``emulator systems'' run IBM's copyrighted operating system on computers other than the ones for which IBM software was written, it said.
``We are confident that the courts in the U.S. and the EU Commission will agree with IBM's position and stop PSI from pursuing its illegal business model,'' McNeese said.
IBM said in a Feb. 26 filing with U.S. regulators that it responded to PSI's EU complaint in December.
In January 2007, Sunnyvale, California-based Platform Solutions filed its own U.S. suit accusing IBM of refusing to supply its operating systems to customers who buy Platform Solutions' IBM-compatible mainframe computer.
Platform Solutions, founded in 2003, is funded by venture- capital firm Blueprint Ventures, Goldman Sachs Group Inc., Intel Corp., InterWest Partners, InvestCorp. and Microsoft.
To contact the reporter on this story: Matthew Newman in Brussels at Mnewman6@bloomberg.net.
Last Updated: April 22, 2008 05:06 EDT
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