Common Market probes antitrust charges against IBM
Brussels — Already locked in an epic 12-year legal struggle with American antitrust authorities, the giant US computer manufacturer International Business Machines Corporation now faces similar accusations by the European Economic Community.
After six years of investigation into complaints that the firm violated Common Market antitrust laws, European competition officials here recently informed IBM they detected four possible abuses by the firm of its dominant market power in the EEC countries.
The charges, which parallel some of those litigated in the United States, involve IBM's pricing practices, information given to competitors, and control of its products.
A voluminous explanation of these charges was sent from Brussels to the IBM headquarters in Armonk, N.Y., with a notice that the firm had some two months to reply. After a process that involves further hearings into the case, the Commission of the European Communities in Brussels could levy a fine of as much as 10 percent of the firm's nearly $23 billion in worldwide sales and forbid the practices held to be violations, but not seek a breakup of the firm's sizable operations in Europe.
Each side in the case expressed confidence it would gain eventual victory.
IBM said that if the commission decided against it, the company might contest the action before the European Court of Justice in Luxembourg, the EEC's appellate body.
The official in charge of the commission competition division, Willy Schlieder, stated, "We feel we have a strong case." He added: "We are aiming at behavioral control in the interests of IBM's US and European competitors, plus customers. . . . If we win, it will be an important step for enhancing competition, favoring both US and European industry."
The company issued a statement saying that it had cooperated fully with the investigations and that it "was confident that it had complied with the rules of the EEC." It also noted that most of the charges by the EEC authorities were similar to some in the United States that had already been "resolved in IBM's favor."
Industry sources said that the company was marshaling a substantial legal team to undertake this case and even a source inside the European Communities Commission felt its small antitrust investigating and legal staff was probably no match for the company's.
There was a general feeling that the European case would not drag on as long as the American one. Nor is any decision expected to radically alter the computer market now dominated by IBM. Anyway, IBM is said to constantly changes its tactics.
In Europe, IBM is said to hold some 60 percent or more of the market in computers. The company has been the frequent target of criticism of rivals and officials who allege it has stifled possible competition. IBM stresses its importance to the European economies. It does nearly $9 billion in sales in all of Europe, the Middle East, and Africa, most of that in europe. It employs some 100,000 persons in the region and has research, production, scientific, or sales facilities in virtually every Western European country.
It ranks far ahead of its closest European competitors, International Computers Ltd. of Britain and CII-Honeywell-Bull of France, which registered a turnover of about $1 billion in 1979.
Despite these frequent grumblings about the IBM dominance in the European market, industry sources said that, surprisingly enough, the four firms that filed complaints before the commission were not European rivals, but subsidiaries of smaller American companies. The sources gave the names of three as Amdahl, Itel, and Memorex, also involved in the American legal struggles involving IBM.
The Commission of the European Communities in the past, however, has sought to encourage the development of European-scale industrial challengers to IBM and other American powerhouses in the high-technology field. However, most such attempts to stimulate cooperation among European firms in such fields as aviation and computers has run up against national rivalries that sp linter the potential european competitive power.