July 26, 2010 10:15 pm

IBM hits out at Microsoft over review

Behind the formal complaints from small technology companies and trade associations that are often the trigger to antitrust reviews in Brussels, a ­power game is being played out between some of the industry’s leading household names.

That struggle broke out into the open on Monday as IBM accused Microsoft of orchestrating a campaign against it.

If this is the case, then Microsoft has just scored a big victory, with Europe beginning an investigation into the mainframe trade that was long the bedrock of IBM’s business, and is still one of its main pillars.

The US computer group lashed out directly at the rival it claims is behind the move.

“Let there be no confusion whatsoever: there is no merit to the claims being made by Microsoft and its satellite proxies,” it said in a statement.

While not directly involved, Microsoft’s hand has been visible behind the scenes. It invested directly in two small US companies that have been among the biggest critics of IBM’s approach to defending its mainframe monopoly.

One, PSI, took its complaint to Brussels before it eventually agreed to be acquired by Big Blue, ending further consideration of the case.

The other, Florida-based T3, is one of two small companies whose protests have now prompted Brussels to dig deeper into IBM’s ­business practices. T3’s advisers have denied that Microsoft was involved in the complaint it lodged with regulators.

IBM’s attempt to put its long-standing rivalry with Microsoft at the centre of the European investigation echoes a similar tactic by Google earlier this year, when Brussels began an informal review of the internet company’s business practices.

Google then pointed to Microsoft’s involvement, both directly and through a trade association in Brussels, the Initiative for a Competitive Online Marketplace, which it started and of which it remains the main sponsor.

One of the three complaints made to regulators about Google came from Ciao, a German e-commerce company that had been acquired by Microsoft. A second complaint, from UK comparative shopping site Foundem, was made with support from ICOMP.

Microsoft has also been on the receiving end of concerted attacks from rivals operating both in and through trade groups in Brussels, including IBM.

The initial European antitrust case was brought by Sun Microsystems and RealNetworks.

Both companies eventually reached financial settlements with Microsoft and the fight was taken up by ECIS, a trade group in which the most influential voices were IBM and Oracle, and in which Google also had a hand.

Microsoft has used its cash before in a way that helped to fund a prominent campaign against IBM. Early last decade it paid money to SCO Group, a small US software company that fought a long legal ­battle with IBM over its support for the Linux open source operating system.

At the time, Linux was seen as the biggest threat to ­Microsoft’s Windows monopoly.

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