EU charges Intel with antitrust violations

July 27, 2007 – The seesaw battle between Intel and international antitrust regulators continues, with the European Union now filing charges against the chipmaking giant accusing it of abusing its marketshare position.

In a “statement of objections,” the European Commission (EC) says it finds Intel has engaged in three types of abuses of its dominant market position: providing rebates to OEMs as long as they buy from Intel; paying OEMs to cancel or delay product launches using AMD CPUs; and offering Intel CPUs below cost for some customers in order to lock up server market share. The EC also said that in a broader scheme, “the three types of conduct reinforce each other and are part of a single overall anti-competitive strategy.”

The EC’s statement of objection is a formal step in an antitrust investigation, in which parties are informed in writing of the EC’s objections. The parties have 10 weeks to reply, followed by the right to an oral hearing. If the accusations are borne out to be true, the EC may order the behavior halted and impose fines.

Not surprisingly, Intel main rival AMD supported the measure. “The EU action obviously suggests that Intel has, once again, been unable to justify its illegal conduct,” according to Thomas McCoy, AMD EVP of legal affairs, in a company statement that also recalled previous antitrust actions against Intel in Japan, with similar ongoing investigations in the US and South Korea.

In a terse PR reply, however, Intel defends its conduct as “lawful, pro-competitive, and beneficial to consumers,” adding that “while we would certainly have preferred to avoid the cost and inconvenience of establishing that our competitive conduct in Europe has been lawful […] at last Intel will have the opportunity to hear and respond to the allegations made by our primary competitor.”


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