EC levels new antitrust charges against Intel

Company accused of abusing its dominant position to the exclusion of AMD

BRUSSELS -- The European Commission today sent Intel Corp. a new set of antitrust charges, the second such charge list within a year, Europe's top regulator said.

The new charges "reinforce the commission's preliminary view ... that Intel has infringed rules on abuse of dominant position with the goal of excluding its main rival Advanced Micro Devices Inc. from the x86 central processing units market," the commission said in a statement.

Intel declined to comment. "We will respond when we have had the opportunity to review the document," said spokesman Chuck Mulloy. "It's arriving now on our fax machine."

Describing it as a "supplementary statement of objections" (SSO), the commission's latest charge sheet focuses on three new elements of alleged abusive conduct that have occurred since it sent its first statement of objections to Intel last July. The new charges will be incorporated into the existing lawsuit.

Intel has paid hefty rebates to a leading European PC retailer conditional on it selling only Intel-based PCs, the commission said. The retailer isn't named but is understood to be Media Markt, one of Europe's biggest chains of PC shops.

In addition, Intel made payments to induce a leading reseller to delay the planned launch of a product line incorporating an AMD-based CPU. The reseller also wasn't named.

The third charge is for paying big rebates to that same reseller conditional on it obtaining all of its laptop CPU requirements from Intel, the EC said.

Besides the new charges, the commission also added evidence supporting the original charges it made against the company a year ago.

In the original statement of objections, the EC, Europe's top antitrust authority, charged Intel with handing out "substantial rebates" to computer manufacturers if they buy most of their x86 computer processing chips from Intel.

The commission also accused the company of paying computer makers for scrapping or delaying the launch of machines fitted with AMD chips and of selling its chips for server computers at below cost to large customers such as governments and universities.

Each of the abuses outlined a year ago and today is "provisionally considered to constitute an abuse of a dominant position in its own right," the EC said.

But taken together, they reinforce each other and are part of a "single overall anticompetitive strategy aimed at excluding AMD or limiting its access to the market," the commission added.

Intel has eight weeks to reply in writing to the SSO. It will then be allowed to defend itself in front of the commission, AMD and other interested parties in a closed-door hearing.

If, after this procedure, the EC still believes Intel is guilty, it will issue a ruling ordering the company to change its business practices in Europe. It may also impose a fine of up to 10% of Intel's global annual sales, which last year stood at nearly $40 billion.

Copyright © 2008 IDG Communications, Inc.

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