Intel Corp suffered a fresh blow on Monday when the European commission extended a long-standing anti-trust investigation into allegations that the world's leading chip-maker forcefully persuaded the EU's biggest electronics retailer not to sell computers using microprocessors made by its rival, Advanced Micro Devices Inc (AMD).
The commission said it was taking over the investigation into commercial practices at Media Markt -- the electronic goods chain owned by Germany's Metro that has 360 shops in 14 countries -- begun by the federal cartel office (Bundeskartellamt). That followed complaints by AMD and came after German prosecutors began investigating allegations that Royal Philips Electronics NV, the Dutch consumer electronics group, bribed Media Markt staff to push its products.
EU officials said the commission, which began examining AMD's complaints about Intel's alleged abuse of its dominant market position five years ago, had reached a "common understanding" with the German competition authority that it would make more sense if it took over the case.
"We're looking at a range of tactics allegedly used by Intel to limit the market penetration of AMD," they said.
They pointed out Brussels was already scrutinizing claims that Intel used predatory pricing to squeeze its smaller US rival from the market. The commission mounted a series of dawn raids at Intel premises, including in Britain, in July last year.
Jens Drews, AMD's head of government relations in Europe, said from Dresden, "We are very happy the commission is taking up this new aspect, and it will strengthen our case. It brings into focus Intel's illegal activities."
Dirk Meyer, AMD president and chief operating officer, told reporters recently that Intel used heavy discounts and predatory pricing to keep AMD out of its markets and accused it of "knee-capping" tactics, including fear and intimidation, to persuade manufacturers and retailers to opt for Intel-only microprocessors.
Intel enjoys around 80 percent of global sales of the microprocessors used in 500 million computers, but has been losing market share to its sole rival in a savage price war that has slashed the cost of laptops. AMD's legal suits allege that whenever it boosts its market share, Intel strong-arms its former customers into switching back.
California-based Intel, which saw second-quarter sales plunge 13 percent to US$8 billion, insisted its activities were legal. It has accused AMD of using lawsuits to "shield itself from Intel's vigorous and fair competition" and of hiding behind competition law to charge higher prices for its own customers.
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