IBM, European Community reach compromise on antitrust issue.
IBM Corporation and the European Community ended a decade of legal confrontation Thursday, reaching an out-of-court settlement in a major antitrust case.
The giant computer-and-office-equipment company and EC authorities announced a compromise settlement under which the EC dropped an antitrust case against the company and IBM promised to inform competitors earlier about details of its large computers.
An EC statement called the case ''one of the most extensive ever handled'' by the European regulators. It stemmed from complaints originally made against IBM by a number of primarily American competitors.
One EC official remarked that, although limited to IBM's System 370 computers , these represent 70 to 80 percent of IBM revenues in Europe, which have been placed at about $10 billion a year, or about one-third of IBM's worldwide turnover.
Although not legally enforceable, the accord will be monitored by the EC to ensure compliance. It is limited to the 370 computer, but is significant in that so many other systems interface with that equipment.
''It's a very generic document that covers the future,'' an EC official remarked.
In Paris, IBM's European headquarters released a statement from chairman John T. Opel, saying that ''this undertaking satisfies the Commission's desires and puts the matter behind us without requiring us to make significant changes in how we do business.''
Mr. Opel's statement was at variance with the EC's view. EC officials said that although ''there are no victors and no vanquished'' in this case, it should amount to a ''substantial modification of IBM's business practices and an improvement of competition.''
The 24-page accord capped a long chapter in European business history that began in the early 1970s. The settlement came after weeks of intensive bargaining between the two sides.
The negotiations, which sometimes involved telephone and telex exchanges and sometimes around-the-clock personal contact, were conducted by teams headed by former US Attorney General Nicholas deB. Katzenbach, who is now vice-president and legal counsel of IBM, and Frans Andriessen, a former Dutch finance minister, who is currently the EC commissioner in charge of antitrust and competition matters.
In 1980, the European Commission charged IBM with violating laws meant to ensure fair and open competition, saying IBM had been ''abusing a dominant market position'' in the sale of its large System 370 mainframe computers. It charged that since IBM had dominant power in the market for such computers, it should furnish competitors and companies that manufacture compatible hardware or software with information before marketing a new IBM product.
IBM steadfastly denied it had such a preponderant position on the European market and sought to get the case dismissed in the European Court of Justice. When this failed, it tried to get the EC to drop the case.
IBM argued that it had been cleared of similar charges in the United States in 1981 when the Justice Department's antitrust division abandoned a longstanding suit over IBM practices. At one stage it secured the diplomatic intervention of the US government in an attempt to persuade the EC to drop the case.
Other unsuccessful lobbying attempts, according to EC sources, involved official European intervention on behalf of the company. When these efforts failed, IBM entered into lengthy negotiations with the European Commission aimed at an out-of-court compromise settlement.
According to commissioner Andriessen, agreement was quickly reached on some aspects of the case. But a final settlement required further hard negotiations and consultations. The EC was reported to have consulted at some point with various European companies in the computer industry.
The main outcome is that, at ''reasonable cost'' to parties in the European market, IBM will supply information pertaining to its System 370 series at least four months after an announcement is made of impending sale; otherwise IBM will make that information available when the product goes on the market if that is earlier.
In return the EC said it would ''suspend'' its original case and charges. The accord will last at least until 1990, when IBM has the right to terminate it after a year's notice.