September 21, 2009

EU Gives Evidence To Support Antitrust Fine Against Intel

Intel company records published on Monday by the European Commission back anti-trust action against the company for illegally shutting out computer chip rival AMD, AFP reported.

Intel was fined a record $1.45 billion in May after the chip maker was accused of abusing its stranglehold on the semiconductor market to crush its main rival AMD.

The EU's findings showed that in one such instance, Dell computers noted in 2003 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.

The EU decision also cited an email from an executive of Chinese high-tech giant Lenovo that spoke of Intel's "naked restrictions" on business partners.

The December 2006 email said: "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." Similar evidence was found concerning an Intel deal with Hewlett Packard.

However, Intel has contested these allegations, arguing that computer makers approach the company seeking price reductions and that the Commission has been upset by reports it missed evidence that could have boosted the U.S. computer chip giant's case.

The company said on Monday that the Commission had "dismissed or ignored extensive exculpatory evidence."

EU Commission spokesman Jonathan Todd said there had been some suggestions that their decision was based rather more on allegations than facts.

But Todd told reporters in Brussels that with the publication of the decision, "you can see for yourselves" precisely the facts on which the decision was based and how Intel broke the law.

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), according to the Commission, which investigates anti-competitive practices.

It cited on example of a retail agreement with Dell that "was not subject to a written agreement but was concluded orally at various meetings".

Intel was accused of using illegal loyalty rebates to squeeze rivals out of the market for central processing units (CPUs) -- the brains inside personal computers, the Commission said.

During the more than five years it was accused of breaking EU antitrust rules, Intel dominated the $30-billion-dollar market for the ubiquitous x86 CPUs with a 70-percent share.

EU Competition Commissioner Neelie Kroes said in May that Intel had harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years.

Last year, Microsoft was ordered to pay a record-breaking fine for failing to cooperate with the Commission in its antitrust battles with the U.S. software giant. However, Intel's fine topped that record of $1.3 billion.

The company is planning to challenge the ruling.


On the Net: