An American judge ordered IBM to pay 1.6 billion dollars (1.5 billion euros) in damages to software supplier BMC Software. Contrary to agreements, IBM had persuaded a joint telecom customer to switch from BMC software to IBM software.
The US court ordered IBM to pay 1.5 billion euros due to a case from 2017. IBM and BMC work together for various customers in providing software for (legacy) mainframe environments. Both parties offer software and compete in the area.
Case from 2017
In the case of joint customers, both companies had agreed not to compete with each other. The agreement prevents IBM from convincing customers to exchange BMC Software for its own solutions.
Completely went against the agreement in 2017, when it sold to telecom operator AT&T, a joint customer. The tech giant managed to convince the telecom operator to remove the BMC software from its mainframe systems and replace it with its own solutions for this type of system.
In its defence, IBM claimed that AT&T had changed the software out of ‘its own motives’. According to Big Blue, an act by a common customer is not a breach of contract at all, as BMC Software claims.
The American judge did not go along with IBM’s defence and imposed a fine of $1.6 billion on the tech giant. $717.7 million for contract damages, $168.2 million in interest and $717.7 million in penalties.
IBM is appealing the judge’s decision. According to Big Blue, the verdict is not based on facts and law. The organization claims it acted out of good faith. In IBM’s eyes, the decision to get rid of BMC Software is the responsibility of AT&T.