EU launches surprise raids on Intel, retailer offices in antitrust investigation

As the chip giant prepares for a closed hearing next month to answer antitrust charges, the EU continues its investigation.

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 2/12/2008

The European Commission (EU) carried out raids on Intel Corp’s Munich offices on Tuesday and also on retailers selling products by the chip giant based on antitrust allegation, according to news reports.

Referring to the raids, the EU issued a statement, “The European Commission can confirm that on 12th February 2008, Commission officials carried out unannounced inspections at the premises of a manufacturer of central processing units (CPUs) and a number of personal computer (PC) retailers. The Commission has reason to believe that the companies concerned may have violated EC Treaty rules on restrictive business practices (Article 81) and/or abuse of a dominant market position (Article 82).”

“We confirm that our offices in Munch have been raided by investigators of the EU and also by German antitrust authorities. We are working to the best of our abilities to cooperate with authorities,” Intel spokesman Chuck Mulloy told EDN, who also noted that investigations of this nature are confidential so Intel would not comment on the subject of the investigation or speculate as to the reason for the raids.

With this action, the European Union increased its pressure on not just Intel as it raided Germany's Media Markt-Saturn and British electrical goods retailer DSG International Plc, which owns Dixons and Currys, reports also said.

Last July, the EC brought its six-year-long investigation to a dramatic culmination when it charged the Santa Clara, Calif.-based chipmaker with violating EU competition laws by allegedly abusing its dominant position in the global microprocessor market.

Intel is preparing for a closed hearing in Brussels next month on March 11 and 12 to answer charges that it abused its dominance of the market for CPUs, slashed prices below cost and offered huge rebates in an attempt to squash its rival Advanced Micro Devices out of the market. Intel  responded last month to those allegations by seeking an oral hearing.

Reports said the EU’s Commission was already investigating Media Markt-Saturn for its ties to Intel and had acted on a reference from the German anti-cartel agency, since it sells PCs with Intel CPUs but not those with AMD CPUs.

EU fines can go as high as 10% of a company's yearly global revenue. Last year, Intel's revenue totaled nearly $7 billion.