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European Commission reveals details of Intel probe

Text by NEWS WIRES

Latest update : 2009-09-21

The European Commission has disclosed the details of its investigation into US computer chip giant Intel after slapping a record 1.06-billion-euro fine for anti-competitive practices on the company last spring.

AFP - The European Commission on Monday published e-mails and other company records to back a record-busting anti-trust action against Intel, which the US computer chip giant is contesting.
   
The EU competition regulators fined Intel a record 1.06 billion euros (1.45 billion dollars) in May, claiming the chip maker abused its stranglehold on the semiconductor market to crush its main rival AMD.
   
In one such instance US personal computer giant Dell, in 2003, noted that Intel's retaliation "could be severe and prolonged with impact to all lines of business" if Dell were to start buying chips from Intel competitor AMD, according to the EU's findings.
   
An email from an executive of Chinese high-tech giant Lenovo was also cited in the published EU decision which spoke of Intel's "naked restrictions" on business partners.
   
"Late last week Lenovo cut a lucrative deal with Intel. As a result of this, we will not be introducing AMD based products in 2007 for our Notebook products," the December 2006 email said.
   
There was similar evidence concerning an Intel deal with Hewlett Packard.
   
Intel has defended such rebates, arguing that computer makers approach the company seeking price reductions.
   
The Commission has been upset by reports that it missed evidence that could have boosted the US computer chip giant's case.
   
"There have been some suggestions that our decision was based rather more on allegations than facts," EU Commission spokesman Jonathan Todd said.
   
"But with the publication of this decision you can see for yourselves precisely the facts on which the decision was based and how Intel broke the law," he told reporters in Brussels.
   
The Commission, which investigates anti-competitive practices, "found that Intel generally sought to conceal the conditions in its arrangements with PC manufacturers and MSH (Germany's Media Saturn Holdings, Europe's largest PC retailer).
   
For example a retail agreement with Dell "was not subject to a written agreement but was concluded orally at various meetings," the commission found.
   
Europe's top competition watchdog had charged Intel with using illegal loyalty rebates to squeeze rivals out of the market for central processing units (CPUs) -- the brains inside personal computers.
   
The Santa Clara, California-based company dominated the 22-billion-euro (30-billion-dollar) market for the ubiquitous x86 CPUs with a 70-percent share during the more than five years it was accused of breaking EU antitrust rules.
   
"Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years," EU Competition Commissioner Neelie Kroes said in May.
   
Intel's fine topped the previous record 899 million euros Microsoft was ordered to pay last year for failing to cooperate with the Commission in its antitrust battles with the US software giant.
   
Intel did not hesitate in challenging that ruling.
   
It is common practice for the commission to publish such a "non-confidential version" of its finding once it has been agreed with the parties involved to delete certain market sensitive information.
   
 

Date created : 2009-09-21

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