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Abstract
The European Commission’s case against IBM for abuse of dominant position (1973–1984) was at the time by far the biggest in the short history of EEC antitrust policy, and would remain so long afterwards. It also set an important precedent for the use of interoperability as competition law remedy. Through extensive archival research, this article shows that the EEC Commission’s action in the IBM case was determined by broader industrial policy aims for the computer sector. The Commission opted for augmenting competition, at the potential detriment of innovation, because this was expected to enhance the competitiveness of European industry.
Notes
1. Another example: N. Dunn, ‘Us vs. them.’ Computer decisions (February 1979), 24–30.
2. ‘Commission Decision of 24 May 2004 relating to a Proceeding Pursuant to Article 82 of the EC Treaty and Article 54 of the EEA Agreement against Microsoft Corporation (Case COMP/C-3/37.792 – Microsoft).’ Official Journal of the European Communities (OJ) L 32 (6.2.2007), 23–28; ‘Summary of Commission Decision of 16 December 2009 relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the EEA Agreement (Case COMP/39.530 – Microsoft (Tying)).’ OJ C 36 (13.2.2010): 7–8; Antitrust: Commission opens formal investigation against Google in relation to Android mobile operating system. Press release European Commission, 15.4.2015.
3. At least from a political point of view: legally, the EEC Treaty grants any firm established within the Community the status of EEC company.
4. Van Laer, Vers une politique industrielle commune. Results of this research have also been incorporated in a broader analysis of the relationship between industrial policy and competition policy: Käseberg and Van Laer, ‘Competition Law and Industrial Policy’.
5. I would like to thank the archivists, and especially Ms. J. Collonval, for their precious help.
6. Especially Hughes, ‘Antitrust law’; Raines, ‘Common Market competition policy.’
7. Van Laer, ‘Developing an EC computer policy’.
8. Pugh, Building IBM, 393, note 7.
9. ACOM, BAC118/83/831, Lewis (DG III) to Grierson, 3.8.73 ; ACOM, BAC118/83/831, Layton to Spinelli, 8.8.73 ; ACOM, BAC118/83/831, Lewis to Layton, 14.8.73 ; ACOM, BAC118/83/831, note by Grierson, 11.9.73 (quotes) ; interview Christopher Layton by author, Brussels, 6.12.2002.
10. ACOM, BAC88/89/374, Note by Commission services, The IBM case, [spring 1982].
11. ACOM, BAC88/89/374, Fragment of the Report of the Session of the European Parliament of 7.4.76 in OJ, n° 202/93, quote translated from French.
12. ACOM, BAC10/85/230, Layton to Van Rhijn (Deputy Director-General DG III), 27.3.81.
13. This would be still the case in the early 1980s, see for instance the following text by F. Andriessen, then Commissioner for Competition: Andriessen, ‘The role of anti-trust’.
14. Van Laer, Vers une politique industrielle commune, especially 97–98 and 283–285.
15. Wigger, Competition for Competitiveness, 179–180.
16. ACOM, BAC88/89/374, Note of Commission services, The IBM case, [spring 1982]. On the Telex case: Pugh, Building IBM, 393, note 7.
17. ACOM, BAC10/85/230, Layton to Van Rhijn, 27.3.81.
18. ACOM, BAC10/85/222, note by Struxiano (DG III), 20.3.80.
19. ACOM, BAC10/85/241, Carpentier (written by Nobbs, DG III) to Davignon, s.d.
20. EC Commission. Bulletin of the European Communities n° 7/8 (July/August 1984), § 1.1.1.-1.1.9 ; ACOM, BAC88/89/374, note of Commission services, The IBM case, [Spring 1982] ; ACOM, BAC88/89/158, Rapport concernant la procédure engagée par la Commission contre IBM dans l’affaire IV/29.479, [SEC/84/1233], 23.5.84. Except for other indications, the following paragraphs are based on these documents.
21. Van Laer, ‘Developing an EC computer policy.’.
22. ACOM, BAC10/85/230, Layton to Van Rhijn, 27.3.81.
23. ACOM, BAC88/89/371, Braun (Director-General DGIII, [written by Garric]) to Narjes (Commissioner for Internal Market and Industrial Innovation), 14.7.82.
24. Hart, ‘IBM in American politics’.
25. ACOM, BAC148/88/509, Braun [written by Garric] to Ortoli (Commissioner for Economic and Financial Affairs), 1.10.82.
26. Van Laer, ‘The European Community and the Paradoxes.’
27. Van Laer, Vers une politique industrielle commune, 267–268.
28. EC Commission. Bulletin of the European Communities n° 1 (January 1982), § 2.4.28.
29. ‘Arrêt de la Cour du 11 novembre 1981, International Business Machines Corporation contre Commission des Communautés européennes. Affaires jointes 60 et 190/81 R.’ Recueil de jurisprudence de la Cour de justice des Communautés européennes. Luxembourg, 1981: 1857.
30. House of Lords, Competition practice.
31. The Economist (10.12.83), 61.
32. E.g. ACOM, BAC441/2006/235, note by J.-F. Verstrynge (cabinet Commissioner for Competition Andriessen), 23.5.84; Interview of Jean Dubois by Laurent Warlouzet.
33. See also Wigger, Competition for Competitiveness, 192–193.
34. ‘Antitrust enforcement will be more selective, two big cases indicate.’ The Wall Street Journal (11.1.82) ; L. Anderson et al. ‘The Antitrusters’ Bust.’ Newsweek (18.1.82), 36–37.
35. W.M. Carley. ‘Travelling salesman: critics see impropriety in European lobbying by antitrust chief.’ The Wall Street Journal (31.3.82), 1 and 22.
36. ACOM, BAC10/85/244, note by Stavaux (cabinet of Commissioner Davignon), 14.3.83.
37. Recommandation du Conseil OCDE sur la coopération entre États membres dans le domaine des pratiques commerciales restrictives affectant les échanges internationaux, C(79)154, 25.9.79.
38. According to a DG Competition official, quoted in Raines, ‘Common Market competition policy’, 139.
39. ACOM, BAC441/2006/236, Briefing note [for Caspari, Director-General DGIV], [April 1984].
40. ACOM, BAC441/2006/235, P.M Schmitt (Head of Division in DG IV) to Caspari, 21.5.84.
41. ACOM, BAC10/85/244, note by Stavaux, 14.3.83. Leucht and Marquis have argued that concerns about the extraterritorial application of antitrust law were at the time an important motive for interactions between the EEC and US antitrust officials. This was definitely the case in the IBM affair. Leucht and Marquis, ‘American influences’.
42. ACOM, BAC105/88/8, [IBM], summary of the hearing of 22–26.2.82, s.d.
43. ACOM, BAC10/85/244, note by Stavaux, 14.3.83.
44. Interview of Jean Dubois by Laurent Warlouzet.
45. Van Bael, ‘The antitrust settlement practice,’ 74.
46. ACOM, BAC10/85/244, note by Stavaux, 14.3.83.
47. By virtue of article 6 of ‘Règlement 99/63/CEE de la Commission, du 25.7.63, relatif aux auditions prévues à l’article 19 paragraphes 1 et 2 du règlement n° 17 du Conseil.’ JO No. 127 (20.8.63), 2268–2270.
48. ACOM, BAC10/85/241, Carpentier [written by Nobbs] to Davignon, [early October 1983].
49. ACOM, BAC88/89/131, K.H. Beckurts (member of Siemens’ Board of Directors) to Narjes (Commissioner for Internal Market and Industrial Innovation), 12.9.83 ; ACOM, BAC88/89/374, H. Nixdorf (president of Nixdorf’s Board of Directors) to Narjes, 4.1.83.
50. In 1983, the twelve companies of the EC Roundtable for IT formed together the ‘Standards Promotion and Application Group’ (SPAG) whose aim was to promote the implementation of OSI through the development of ‘functional standards’.
51. The ‘Information Exchange System’ for the ESPRIT programme was for instance meant to be an experimental implementation of OSI.
52. ACOM, BAC88/89/175, J.E. Ferry (Director DG IV/B) to Beelitz (cabinet of Commissioner Narjes), 12.1.84 and the correspondence conserved in the same file.
53. ACOM, BAC441/2006/235, H. Hultzsch (president of SEAS) to J.E. Ferry (Director of DGIV/B), 10.2.84.
54. Quote from ACOM, BAC10/85/358, Carpentier to Paemen, 25.5.84. See correspondence conserved in the same file.
55. An example of written technical advice: ACOM, BAC10/85/244, W. De Backer (Director of the Directorate Information Technology at DG Personnel and Administration) to Paemen (Head of Cabinet Commissioner Davignon), 12.6.84. Officials of DG IV and the members of the Advisory Committee on Restrictive Practices and Dominant Positions (composed by representatives of the Member State Administrations) also visited this Directorate for an information session. ACOM, BAC441/2006/235, J. Dubois (DGIV/B) to Raissis (chief of unit IX/E/3), 24.1.84.
56. ACOM, BAC441/2006/235, note by J.-F. Verstrynge (cabinet Commissioner Andriessen), 23.5.84.
57. ‘IBM says it would appeal negative ruling in EC Case.’ The Wall Street Journal (13.6.84) ; ACOM, BAC105/88/8, IBM s’oppose à la procédure antitrust de la CEE, press communiqué Agence France Presse, 13.6.84.
58. ‘Europe is Blue.’ The Wall Street Journal (19.6.84), 6.
59. ACOM, BAC88/89/371, Kohl to Narjes, 14.6.82 ; ACOM, BAC88/89/371, Diebold to Kohl, 7.4.82.
60. E.g., Archives Bull, 93/DIGE/PDE01/54, de Robien to Stern, 4.6.84, alludes to the fact that IBM Europe had recently approached officials of the French Ministry for Finance.
61. ACOM, BAC10/85/472, L. Tindemans to Davignon, 8.6.84.
62. Wording borrowed from Oakley, Director of Alvey (the British government programme to support IT R&D). ‘Why Europe is trying to shackle IBM.’ Business Week (7.6.84).
63. ACOM, BAC88/89/374, Caspari to von Moltke, 5.7.82.
64. ACOM, BAC105/88/8, opinion of Advisory Committee on Restrictive Practices and Dominant Positions in its meeting of 12–14.6.84 on the draft decision in the case IV/29.479-IBM, 14.6.84.
65. IBM’s arguments are stated, a.o., in ACOM, BAC105/88/8, note by IBM [for the EEC Commission], 28.5.84.
66. ACOM, BAC10/85/244, note by Stavaux, 14.3.83.
67. ACOM, BAC105/88/8, note by IBM [for the EEC Commission], 28.5.84.
68. ACOM, BAC10/85/244, note by Stavaux, 14.3.83.
69. See ‘IBM’s role in Europe.’ The Financial Times (19.1.84), 37.
70. Van Laer, ‘The European Community.’
71. On this affair of industrial espionage, and the arrangement between IBM and Hitachi which concluded it, see ‘Hitachi stealing technical secrets.’ The Financial Times (6.1.84), 9.
72. ACOM, BAC10/85/244, Katzenbach (First Vice-President and General Counsel of IBM International) to Ferry, 24.5.84.
73. Mentioned in ACOM, BAC10/85/244, De Backer to Paemen, 22.11.83.
74. A copy of this brochure of October 1984 is conserved in ACOM, BAC25/89/15.
75. Van Bael, ‘The Antitrust Settlement Practice,’ 70.
76. See ‘Why Europe is trying to shackle IBM.’ Business Week, 7.6.84 ; ‘IBM battling for dominance in Europe’. In International Herald Tribune (12.6.84), 9 and 11; ‘A chance for IBM’s antitrust knight to lay down his lance.’ The Economist (30.6.84), 57–58.
77. Maisonrouge, Manager international, 145.
78. ACOM, BAC10/85/244, note by Stavaux, 14.3.83. (Quote translated from French.).
79. Lomholt, ‘The 1984 IBM Undertaking’, 10.
80. ACOM, BAC441/2006/235, note by B. van der Esch (Legal Service), 11.4.84.
81. Judgment of the Court of 6 March 1974, Istituto Chemioterapico Italiano S.p.A. and Commercial Solvents Corporation v Commission of the European Communities, Joined cases 6 and 7–73.
82. The document cites the Judgment of the Court of 21 February 1973, Europemballage Corporation and Continental Can Company Inc. v Commission of the European Communities, Case 6–72; Judgment of the Court of 13 February 1979, Hoffmann-La Roche & Co. AG v Commission of the European Communities, Case 85/76; Judgment of the Court of 9 November 1983, NV Nederlandsche Banden Industrie Michelin v Commission of the European Communities, Case 322/81.
83. This appears clearly in the Bull archives, and especially file 93/DIGE/PDE01/54.
84. Mentioned in Archives Bull, 93/DIGE/PDE01/54, Stern to Andriessen, 3.7.84 and de Robien to Stern e.a., 12.7.84.
85. Archives Bull, 93/DIGE/PDE01/54, de Robien to Stern e.a., 12.7.84.
86. ACOM, BAC441/2006/236, Report of a meeting between representatives of IBM and DGIV/B of 24.4.84, s.d.
87. Bull had contacts about the IBM case with both the Ministry for Economy and Finance (Archives Bull, 93/DIGE/PDE01/54, de Robien to F. Lorentz, 8.4.84 ; Archives Bull, 93/DIGE/PDE01/54, de Robien to Stern e.a., 22.6.84) and the Ministry for Industry and Research (Archives Bull, 93/DIGE/PDE01/54, J.C. Hirel, Director for Electronics and Informatics Industries at the Ministry for Industry and Research, to Stern, 21.12.83).
88. Archives Bull, 93/DIGE/PDE01/54, document by Bull for de Ricou (French Ministry for Economy and Finances), in the annex of a letter from de Robien to C. Dreyfus-Cloarec (Bull), 9.2.84. (Quotes translated from French.).
89. E.g. Archives Bull, 93/DIGE/PDE01/54, de Robien to R. Gallois (Juridical and Fiscal Directorate of Bull), 11.1.84.
90. ‘Why Europe is trying to shackle IBM.’ Business Week (7.6.84).
91. J.E. Ferry to Caspari (Director-General DG IV), 5.6.84.
92. Archives Bull, 93/DIGE/PDE01/54, R. Gallois to Stern, 19.9.83 ; Archives Bull, 93/DIGE/PDE01/54, de Robien to F. Lorentz, 8.4.84 ; de Robien to Stern e.a., 22.6.84 ; Archives Bull, 93/DIGE/PDE01/54, Stern to Caspari, 26.7.84.
93. ACOM, BAC441/2006/235, R.W. Wilmot to J. Stern, 6.3.84.
94. The undertaking by IBM has been published in full in EC Commission, Bulletin of the European Communities, No. 10 (October 1984), § 3.4.1.
95. Hughes, ‘Antitrust Law,’ 196.
96. ACOM, BAC105/88/8, Andriessen to Katzenbach, 1.8.84.
97. E.g. ACOM, BAC441/2006/235, Gallois to Ferry, 27.4.84.
98. ACOM, BAC441/2006/236, Report of a meeting between representatives of IBM and DGIV/B of 24.4.84, s.d.; ACOM, BAC441/2006/235, Ferry to Caspari, 30.4.84.
99. EC COMMISSION, Bulletin of the European Communities, n° 7/8, July/August 1984, § 1.1.8.
100. ACOM, BAC88/89/371, Beelitz to Narjes, 30.5.84 ; ACOM, BAC105/88/8, von Moltke to Narjes, 4.9.84.
101. See ‘Japan sees little gain in IBM-EC pact.’ International Herald Tribune (6.8.84), 19.
102. Interview with Michel Humbert by A. Van Laer; Dréan, L’industrie informatique, p. 27–31.
103. P. Cheesright and G. De Jonquières, ‘Brussels Halts Competition Suit after IBM Pledge.’ Financial Times (3.8.84), quoted by Wigger, Competition for Competitiveness, 190.
104. Scherer, ‘Thinking’, 65–66.
105. According to Daniel J. Gifford and Robert T. Kudrle, the above mentioned different US and EU approaches prevailed in their respective cases against Microsoft. ‘Antitrust approaches.’
106. Hoehn and Lewis, ‘Interoperability remedies’.
107. Van Laer, Vers une politique industrielle commune, 287–294.
108. Forrester, ‘Due process in EC competition,’ 834.
109. See Wigger, Competition for Competitiveness, 242–245.