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EC Files New Charges Against Intel

EC Hits Intel with A Second Supplemental Indictment-like Statement of Objection - Charged with Three More Antitrust Violations

That thud you heard yesterday was the European Commission hitting Intel with a second supplemental indictment-like statement of objection (SO) charging the company with three more instances of antitrust violations designed to keep AMD out of the market.

Miraculously the news arrived just as AMD was posting its seventh consecutive quarterly loss.

The EC described these “additional factual elements” to its previous charges as reinforcing each other and forming a “single overall anticompetitive strategy.”

It is threatening Intel with huge fines that could garnish up to 10% of Intel’s annual revenue if it doesn’t change its pricing practices. Figure Intel sales at about $38 billion.

Intel believes it defanged the EC’s first SO during a closed-door hearing in March which means the commission needed to bolster its case.

Since in Intel’s opinion the new charges don’t make much of a substantive difference, the EC may have to go out in search of still more evidence that will stand up in the Court of First Instance and so a third SO could be in Intel’s future.  

Anyway at this point – after staging those dramatic raids on resellers such as Metro AG in early February – the EC is charging Intel with exclusive dealings with European retailer MediaMarkt AG and with paying it substantial rebates not to carry equipment based on chips from poor floundering AMD.

The original – still unresolved – charges that the EC filed last year accuse Intel of using rebates and coop payments to OEMs and selling below-cost to governments and universities to stop AMD from selling its processors.

With the new SO the EC has now added the charge that Intel paid a new unidentified OEM to delay the launch of an AMD product line and gave it rebates dependent on it using only Intel chips in its laptops.

Intel has always claimed its policies are lawful, pro-competitive and benefit consumers.

Getting a bit feistier than usual Intel’s statement yesterday said the “issuance of a second SO suggests that the Commission supports AMD’s position that Intel should be prevented from competing fairly and offering price discounts which have resulted in lower prices for consumers.”

It said it was “confident” the charge will be shown to be unfounded and added that it’s “clear that the allegations stem from the same set of complaints that our competitor, AMD, has been making to regulators and courts around the world for more than 10 years.”

Intel has eight weeks to reply to the latest set of charges.

Intel is also being investigated by the US Federal Trade Commission and the attorney general of the state of New York, where AMD may built a plant if its tight budget allows.

Intel will probably appeal a recent $25.5 million antitrust decision in Korea and settled one a few years ago in Japan, both based pretty much on the same allegations. Intel blames all of this on AMD.

There is also the little matter of AMD’s private antitrust suits against it.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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