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Monday, July 21, 2008

EU Expands Antitrust Case Against Intel

By Aoife White
Associated Press
       BRUSSELS, Belgium — European Union regulators have expanded their antitrust case against Intel Corp., claiming that the world's largest semiconductor maker has deliberately squeezed rival AMD out of the chip market.
    The European Commission said last week that it has added three new charges against Intel, warning that it may order Intel to change its behavior under threat of large fines that can total 10 percent of its global revenue. Intel's 2007 sales were $38 billion.
    Intel said the new charges did not reflect any major change to the first group sent in July 2007.
    The company said in a statement that its conduct "has always been lawful, pro-competitive and beneficial to consumers." It claimed that the EU seemed to be supporting AMD's view that Intel should stop price discounts that have lowered prices for customers.
    "This is still just the EU doing what the EU does — it hasn't changed our posture with respect to Europe," Intel's general counsel, Bruce Sewell, said in an interview with The Associated Press. "This doesn't change our exposure. It's just more of the same."
    Advanced Micro Devices Inc.'s vice president of legal affairs, Tom McCoy, said the latest charges reinforce AMD's long-standing allegation that Intel is "robbing consumers of their fundamental right to choose."
    "No antitrust laws anywhere in the world permit Intel to pay retailers and computer manufacturers to boycott non-Intel products," McCoy said in a statement.
    Intel, based in Santa Clara, Calif., sells more than three-quarters of all microprocessors that run computers using Microsoft Corp.'s Windows operating system. AMD is its only real rival.
    The EU regulators accused Intel of giving a major personal computer retailer — Germany's MediaMarkt AG — substantial rebates in return for it selling only Intel-based computers.
    It said Intel also paid a manufacturer to delay an AMD range of x86 central processing units, or CPUs, and gave rebates to the same company in return for buying all its laptop CPUs from Intel.
    The EU said all Intel's behavior was part of a coordinated strategy to exclude AMD or limit its access to the market. Intel has eight weeks to respond and can seek a hearing to put its defense to European regulators.
    Regulators have previously accused Intel of selling chips below average cost to strategic server customers — such as governments and universities — when bidding against AMD-based products.
    The EU said below-cost or predatory pricing may be good for shoppers in the short term but ultimately harms them by killing off rivals that would offer more choice and set a faster pace for innovation in the long term.
    Officials claimed last year that Intel's abusive behavior started in 2003 — two years after the EU opened an antitrust probe triggered by an AMD complaint — and went on for approximately three years, the Commission said.
   

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