Intel disappointed by $25.4M Korea FTC antitrust fine, may appeal

This decision is the result of a probe that began in 2005, when South Korea joined the European Commission and Japan in investigating certain aspects of Intel’s business practices following a complaint by rival Advanced Micro Devices Inc.

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 6/5/2008

Following a ruling by the Korea Fair Trade Commission (KFTC) that Intel Corp violated the country’s antitrust law by offering discounts on microprocessors to two PC makers and fining the chip giant $25.4 million (26 billion Korean won), Intel is considering an appeal.

“We are extremely disappointed by the decision of the Korea Fair Trade Commission. Unfortunately it represents an outcome that will dampen, not enhance, the price competition that has resulted in lower prices for customers and consumers,” Intel spokesman Chuck Mulloy told Electronic News.

This decision is the result of a probe that began in 2005, when South Korea joined the European Commission and Japan in investigating certain aspects of Intel’s business practices following a complaint by rival Advanced Micro Devices Inc.

“The KFTC appears to have adopted AMD’s accusation that Intel is competing too aggressively, by offering customers attractive, discounted prices to win their business -- despite the fact that Intel’s prices invariably were above cost and profitable,” Mulloy continued.

KFTC said Intel offered Samsung Electronics Co and Trigem Computer Inc rebates totaling $370 billion in a period from 2002 to early 2005 constituted unfair trade, according to the Wall Street Journal and other news reports.

“In reaching its decision, we can only conclude that the Commission has misinterpreted or ignored voluminous factual and economic evidence that refute AMD's accusations,” Mulloy continued.

“Intel sees this decision as a set back for consumers because at bottom what is being challenged is Intel’s discounting. Antitrust policy should encourage, not regulate and control, price discounting. We will review the findings in detail. We expect that Intel will request a further review and if it proves necessary, an appeal which will permit a court to review the case from scratch and reach an independent decision,” he concluded.

Antitrust authorities in several other countries and in New York State are also still looking into Intel's sales practices.

Today, Intel and AMD are appearing in court in Delaware as part of the US antitrust allegations against Intel.