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AT&T/IBM Global Network - Telecommunications services

United Kingdom
31/10/1999
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AT&T has acquired the IBM Global Network (IGN) business from IBM. The parties developed a “value chain” model whereby different types of telecommunications services could be ranked in terms of the extent of value-added components they contained. The Commission cleared the operation, approving a non-competition obligation whereby IBM undertakes for a period of five years following the sale of IGN not to recreate a facilities-base network or to engage in any business involving the provision of access to and transport service on a facility-based or leased line based network owned by IBM. The Commission also found that the parties’ combined market shares would be low enough to avoid any competition concerns arising. The issue was considered as to whether AT&T, through its participation with BT in their global joint venture, might be in a position to limit the supply of basic telecommunications services, i.e. level one and level two services, to competitors. However, in view of the fact that BT/AT&T transactions neither created nor strengthened any dominant position at level one or two which could be leveraged downstream, it could be taken that no vertical effects sufficient to give rise to competition concerns arose. Further, there was no evidence to suggest that a competitor in this particular sector suffered any cost disadvantage as a result of operating in this way. (Case No. IV/M.1396, decision of 22.04. 99)

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