Brazil: Antitrust regulator fines IBM over Red Hat deal

Brazil’s Administrative Council for Economic Defence (CADE) has issued a BRL 57 million (US$13.9 million) fine on IBM for completing the purchase of Red Hat before approval by the country’s antitrust agency Cade, reported Valor Economico. The value, based on an agreement with the company, was very close to the maximum penalty applicable, which is BRL 60 million (US$14.6 million). 

The deal, worth US$34 billion, was completed in July, but only approved by CADE last month. With Red Hat, the most expensive deal in IBM’s history, the company hopes to gain on competitors in cloud computing, where users store information remotely instead of on their own machines.

IBM was an early proponent of the cloud more than a decade ago but fell behind and Microsoft gobbled up the majority of the now-booming market.

IBM’s counterpunch has been to court companies that want to use the cloud but keep their most sensitive data locked down on internal computers, a model dubbed the “hybrid cloud.”

“I view this as a defining moment in IBM’s cloud journey,” IBM CEO Gina Rometty said. “This puts us in position in hybrid cloud.”

Full Content: Telecom Paper

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