The Wall Street Journal was first to report today that NEON Enterprise Software, a maker of mainframe software, will lodge an antitrust complaint against IBM with the European Commission one of these days.
Meanwhile NEON has issued a press release confirming its intent to do so.
In December, NEON filed an antitrust lawsuit in the US against IBM over its practices in the mainframe market, which NEON calls "anticompetitive". In January, IBM then filed a countersuit against NEON, alleging an infringement of its intellectual property.
This SYS-CON Media article puts NEON's announcement into the context of other complaints against IBM and says that Allen & Overy, a law firm that previously helped such clients as Sun Microsystems with EU antitrust matters, is drawing up NEON's EU complaint.
French FOSS startup TurboHercules previously filed an EU antitrust complaint against IBM
Even though NEON's software is proprietary, I want to talk about the matter on this blog because there's a factual connection between NEON's complaint and the one previously lodged by TurboHercules, the French free and open source software startup that received a patent threat letter from IBM. NEON's press release also mentions TurboHercules.
By the way, after IBM's threat letter to TurboHercules became public, some IBM allies and apologists tried to muddy the water by claiming that IBM sent the threat letter only in reply to a question from TurboHercules, and others came up with the excuse that IBM was merely defending itself against an antitrust complaint. So if you heard any of those gross misrepresentations, you can easily verify that IBM asserted an infringement of "intellectual property" (as a synonym for patents) several months earlier. Apart from timing, an antitrust complaint could never have triggered the defense clause contained in IBM's patent pledge. IBM simply doesn't want to provide interoperability where its business interests collide with the concept of customer choice, even though IBM does a huge amount of lobbying to demand interoperability from others. Double standards. Open hypocrisy.
Differences and parallels between the problems NEON and TurboHercules have with IBM
NEON and TurboHercules are different companies that appear to have no connection whatsoever. NEON is a 15-year-old US company that sells proprietary, closed-source software. TurboHercules is a European FOSS startup.
NEON's founder, John Moores Sr., is a billionaire philanthropist and one of the founders of BMC Software, a major mainframe software company. TurboHercules' founder, Roger Bowler, is a mainframe fan and started the Hercules open source project about a decade before incorporating TurboHercules.
What NEON and TurboHercules have in common is that both are victims of IBM's bullying tactics.
Both just want to provide mainframe customers with much-needed cost-effective choice for their legacy software: hundreds of billions of lines of program code that are still in use, a very large part of it written in COBOL. NEON's zPrime software makes such legacy workloads eligible for execution on lower-cost (but fully functional) coprocessors. TurboHercules emulates the mainframe (System z) CPU on Intel servers.
But IBM wants to milk its locked-in mainframe customer base, hugely overcharging for everything that's needed to run legacy software.
NEON and TurboHercules are both very innovative in their way. IBM uses intellectual property, which should spur and protect innovation, as a destructive weapon against those companies. IBM told some mainframe customers using NEON's product that in IBM's opinion they're not allowed to do so and alleges that NEON wants to "induce" those customers to breach their license agreements with IBM. Many of you may be familiar with the Digital Millennium Copyright Act (DMCA), and IBM bases a part of its claims against NEON on that piece of legislation.
By the way, here's a YouTube video that NEON produced to explain why it believes mainframe customers have the right to use its zPrime product.
Procedural situation in the EU
Now NEON is about to file its EU antitrust complaint, and the European Commission is looking at TurboHercules' recent complaint. Previously, in January 2009, an EU antitrust complaint against IBM had been filed by T3 Technologies. The Commission still has to decide how to proceed with that one, too. If the regulator decides to lauch a full-blown investigation, IBM may have to defend itself against three complainants.
The European Commission isn't on any hard deadline for this but under its best practice guidelines a decision in the coming months is reasonably likely.
Some of the world's most critical data processing applications still run on mainframes. When any of us make a wire transfer, chances are that the bank will process it on a mainframe. Still today. Its demise was predicted a long time ago, but the mainframe isn't going away anytime soon. It's going strong. So it's an issue of major relevance to the worldwide (and European) economy to ensure that innovative solutions such as the ones provided by NEON and the Hercules open source project are available and that IBM doesn't bully anyone: neither customers nor solution providers. Enough is enough.
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