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EU regulators charge Intel with abuse of monopoly

EU regulators said yesterday they had charged Intel Corp with monopoly abuse for blocking rival computer chipmaker Advanced Micro Devices Inc's (AMD) access to customers.

They alleged that Intel gave "substantial rebates" to computer makers for buying most of their x86 computer processing units (CPU) from Intel; that it made payments to manufacturers to get them to delay or cancel product lines using AMD chips; and that it sold its own chips below cost to certain server customers to try to muscle into that business.

"These three types of conduct are aimed at excluding AMD, Intel's main rival, from the market," the European Commission said. "The three types of conduct reinforce each other and are part of a single overall anticompetitive strategy."

Intel, based in Santa Clara, California, is the world's biggest chipmaker. It has 10 weeks to reply to the preliminary charges and can seek an oral hearing to defend itself, after which regulators may make a decision that would force the company to change its ways under threat of fines.

The EU's executive arm has been investigating Intel's business behavior since 2001, looking into complaints from AMD and computer manufacturers that it used its power as a market leader to shut out rivals for chips that run on Microsoft software.

The case has run hot and cold over the last six years. EU regulators had to shut down one line of inquiry when Taiwan's VIA Technologies withdrew its complaint about chipsets in 2002. At the time, they also said they did not have enough evidence to pursue an AMD complaint on microprocessors.

AMD filed another complaint in 2004 that EU officials said they had no choice but to investigate -- or risk AMD taking court action for negligence.

In 2005, EU regulators raided Intel offices in Britain, Germany, Spain and Italy two weeks after AMD filed another set of lawsuits in Japan and the US.

The EU investigation widened last year to include AMD's allegations that Intel had pressured Europe's largest consumer electronics retailer Media Markt not to offer computers that carried AMD chips.

Microprocessors from Intel dominate the global market in desktop computers that run Microsoft's Windows operating system, accounting for 90 percent in revenue terms.
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