EC hits Intel with antitrust charges
By Colleen Taylor -- 7/27/2007
Bringing a six-year-long investigation to a dramatic ending, the European Commission (EC) today confirmed that it has charged Santa Clara, Calif.-based chipmaker Intel Corp. with violating European Union (EU) competition laws by allegedly abusing its dominant position in the global microprocessor market.
In a statement released today, the EC said that Intel has infringed EU rules and aimed to exclude its main rival, Advanced Micro Devices Inc (AMD), from the x86 CPU market. The EC has sent a statement of objections (SO) to Intel; the SO is a formal step in EC antitrust investigations in which the EC informs the parties concerned in writing of the objections raised against them.
The EC said that its SO is based on evidence collected in a thorough, multi-year investigation of Intel's business practices first launched in 2001. The commission based its case on evidence seized from Intel offices and collected from PC manufacturers across Europe.
According to the EC, Intel's abuse of its dominant position has been threefold: Intel has provided "substantial rebates" to original equipment manufacturers (OEM) that agree to stipulations that they obtain all, or the great majority, of their CPU requirements from Intel; Intel has made payments in order to induce an OEM to either delay or cancel the launch of a product line incorporating an AMD-based CPU; and Intel has offered CPUs on average below cost in the context of bids against AMD-based products for strategic customers in the server segment of the market.
For its part, Intel has denied any wrongdoing. "We are confident that the microprocessor market segment is functioning normally and that Intel's conduct has been lawful, pro-competitive and beneficial to consumers," Bruce Sewell, Intel's senior VP and general counsel, said in a statement released today.
Meanwhile, AMD, which added to the EC's probe in 2005 when it filed with the commission its own complaint against Intel, expressed gratification with the charges. "Intel has circled the globe with a pattern of conduct, including direct payments, in order to enforce full and partial boycotts of AMD," Thomas M. McCoy, AMD's executive VP of legal affairs and chief administrative officer, said in a separate statement. "The EU action obviously suggests that Intel has, once again, been unable to justify its illegal conduct."
The EC charges do not represent the first time Intel has come under fire for allegedly violating antitrust laws. In March 2005, Japan's Fair Trade Commission ruled that Intel had violated the country's anti-monopoly laws by forcing full or partial exclusivity with five Japanese PC makers. Also, an active antitrust investigation of Intel continues in South Korea.
AROUND THE WEB
For more from around the Web on the Intel antitrust case, see:
Winners & Losers: Why is Intel having second thoughts about crushing AMD?, Electronic News
Intel antitrust case is simpler than Microsoft's, AMD says, InfoWorld
Antitrust charges filed against Intel, San Jose Mercury News
Slashdot discussion board on the charges
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