The European Commission launches two formal investigations for bundled sales and abuse of dominant position

On Monday, July 26th, 2010, the European Commission published a press release annoucing it was launching two formal investigations against IBM, whom it suspects of illegal bundling and abuse of dominant position.

Widespread in the computer field, illegal bundled sale refers to the tying of the sale of a good or service (computer hardware for instance) to the purchase of another good or service (for instance computer software) 1.

With this proceedings, the European Commission starts to tackle this issue, which encourages antitrust practices, limits competition and penalizes the free software sector. Such practices are widely spread, both over professional and mass markets: it is time for the Commision to act upon this topic, especially compared to the French authorities' idleness.

The first investigations inquire into IBM's mainframe activities.

The first investigation was launched after a complaint by emulation software vendors T3 and Turbo Hercules, who claim that IBM is tying the sale of its software to the purchase of its server operating system. The Commission emphasized that "the complaints contend that the tying shuts out providers of emulation technology which could enable the users to run critical applications on non-IBM hardware."

The second investigation is related to alleged antitrust practices, which would aim at "foreclosing the market for maintenance services (i.e. keeping potential competitors out of the market), in particular by restricting or delaying access to spare parts for which IBM is the only source."

April welcomes the Commission look into those anticompetitive practices and hopes that it will not limit iself to the professional computer market. Such constraints to free consumer choice are just as potent on the mass market, through the systematic bundling of Microsoft's operating system Windows with each new computer, a trade practice against which no public action has ever been conducted despite its illegality and the massive mobilisation against it.

The European Commission had already taken a first step by sentencing Microsoft for bundling its multimedia player Windows Media Player to its operating system Windows, then by investigating the bundling of its web browser Internet Explorer to the same operating sytem. So this investigation on forced sale tying hardware with software is a new step, which should lead the Commission to position itself in favor of consumers's freedom to choose their own software and hardware.

Even though this first step is promising, the Commission needs to sustain its efforts by forbidding forced sales on all markets, starting with the ubiquitous sale of Microsoft's operating system Windows amongst mass market sellers. Only an action on all markets will restore competition and consumers' rights, and will guarantee everyone free choice of its hardware and software as well as the development of free software solutions for everyone.

• 1. In this instance, the sale of software is subjected to the purchase of hardware: to get the software, one has to buy the hardware as well