ARMONK, N.Y. ( TheStreet) -- IBM (IBM) is being investigated by the U.S. Justice Department for allegations that it abused its dominance of the mainframe business to squeeze rivals, says Computer and Communications Industry Association Chairman Ed Black.
CCIA, a non-profit trade group, had urged the Justice Department to open the probe, reports Reuters.
CCIA accused IBM of withdrawing licenses for its operating systems from customers who use non-IBM hardware, retaliating against business partners deemed disloyal, and bundling its mainframe operating systems with hardware. The Reuters report also said CCIA alleges that IBM refused to license its mainframe operating systems to users of "Hercules" open-source software for installation on machines other than IBM mainframes.
The Justice Department has begun a CID investigation process, equivalent to a subpoena, and its scope is quite broad with antitrust being one of the primarily focal points, Black said, according to Reuters.The news comes after software developer T3 Technologies had filed an antitrust suit against IBM in Manhattan federal district court. The judge threw out the suit on Sept. 30. In a statement, IBM highlighted the dismissal of the suit, but Black pointed out the Obama administration's pledge to deal with antitrust seriously. The probe by the Justice Department is similar to others it has opened into dominant firms. The head of the department's antitrust division, Christine Varney, said in May she planned to take a more aggressive approach with firms that use their market power to crush competition, Reuters notes.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV