Friday, July 27, 2007

EU Charges Intel over for competition abuse


Times Online and Agencies in Brussels

The European Union has this morning formally charged Intel with monopoly abuse over a long-running campaign to block rival computer chipmaker Advanced Micro Devices (AMD) from getting access to customers.

In a statement confirming the charges, EU regulators alleged that Intel gave "substantial rebates" to computer makers for buying most of their computer processing units (CPUs) from the US manufacturer.

The regulators also accused Intel of paying computer manufacturers to delay or cancel products that used AMD chips as well as selling certain products below cost price to corner markets.

"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, the world's biggest chipmaker, has ten 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 has been investigating Intel's business behaviour since 2001, looking into complaints from AMD and computer manufacturers that it used its power as a market leader to shut out rivals.

The case has had a chequered history. EU regulators had to shut down one line of inquiry when Taiwan's Via Technologies withdrew its complaint in 2002.

AMD filed another complaint in 2004. A year later, EU regulators raided Intel offices in Britain, German, Spain and Italy.

Last year the EU widened its investigation 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 per cent in revenue terms.

Separately, the EU said yesterday that is has launched legal proceedings against Suez and Electricite de France, the French energy companies, on suspicion of employing anti-competitive tactics in the French and Belgian electricity markets.

The commission did not provide details of its investigation but said the companies' arrangements might have created "higher prices and lower quality of service for all electricity consumers" in the two countries.

The commission said it is still investigating whether the power companies EU competition laws before deciding whether or not to press charges.

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