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FTC probes HP, Oracle, IBM: reports

The Korean units of multinational IT giants HP, Oracle and IBM are under investigation by the Fair Trade Commission, the country’s anti-trust agency, for alleged unfair business practices, according to news reports here.

The FTC recently sent its investigators to HP Korea’s headquarters in the financial district of Yeouido to look into the suspicions. Oracle and IBM have also been investigated, the reports said.

The FTC declined to comment. HP, Oracle and IBM could not be reached for comment.

Industry sources said the three global IT behemoths have long-dominated Korea’s database and server system market, but noted that this is nothing new.

Korea’s corporations and even government agencies also do not have any other options or alternative IT companies to set up or develop their network systems as no one can match the big three’s technology and know-how, they explained.

Korean companies, such as Samsung SDS, POSCO ICT and LG CNS, could be considered market players. But their database and server infrastructure business is relatively small compared with HP, Oracle and IBM, according to the sources.

Also, the Korean IT firms’ capacity does not extend beyond managing the systems of their affiliates or parent companies, or integrating systems of software/hardware database and servers provided by the global IT giants, the sources said.

Since it is difficult for a company to change its system to another provided by a different IT firm after using it for a long time, Korean enterprises are bound to have a long relationship with one particular IT service provider.

Even though most enterprises and government agencies nowadays chose and build their networks via competitive tenders, companies normally take such relationships into account during a bidding process.

Among the three, Oracle is the biggest in Korea and provides the most expensive database systems, while HP is seen expanding its server business here amid the slowdown in the personal computer market. IBM has traditionally been one of the major players in business-to-business server system set-ups.

One of the sources said it was no surprise to hear that the FTC could be looking into their alleged monopolization or collusion, given that the agency conducts probes in the IT industry routinely, once every three to five years.

The anti-trust watchdog previously sought to expand its probe into HP, Oracle and IBM in 2006 following its investigation of Samsung Electronics, LG Electronics, Jooyon Tech and Trigem Computer linking with Intel, according to media reports.

By Park Hyong-ki (
Korea Herald Youtube