EU commission levels unfair competition charge on Intel

The European Commission has said that it suspects Intel Corp. of more instances of unfair competition, and is expanding the antitrust case against the US chip maker.(See: EC likely to file fresh anti-trust charges against Intel) 

The commission wrote to the Santa Clara-based chip maker outlining several new complaints about the way Intel misused its dominance of the chip market, to the direct disadvantage of chief rival Advanced Micro Devices Inc. (AMD).

The letter outlines three charges of Intel having offered discounts to a major European personal computer distributor to favour its products, of paying a PC manufacturer to delay marketing a model line using AMD chips, and then paying the manufacturer to use Intel microprocessors.

In a statement on its website, Intel countered the Commission's charges by saying that "We're naturally disappointed the Commission has decided to issue a new statement of objections (SO). Intel says that the issuance of a second SO suggests the Commission supports AMD's position, and that Intel should be prevented from competing fairly and from offering price discounts that have resulted in lower prices for consumers.

The European Commission has been probing into Intel's business practices in Europe, and whether the company has been unfairly discouraging competition or impacting consumers adversely. Intel is accused of offering rebates, marketing payments and below-cost sales to computer manufacturers to discourage their use of rival AMD's chips in their product lines. As per EU rules, companies holding dominant market positions such as Intel have special obligations to avoid obstructing competitors.

EU's probe dates back to 2006, when rival AMD complained to German authorities that Intel and Metro AG kept AMD's chips away from Metro's Media Markt stores.

Though Intel denies the allegations made by the European Commission, it is facing similar investigations from several agencies, including the Federal Trade Commission (FTC), which opened a formal probe into the chip maker's conduct in June.

The US state of New York is also investigating Intel. A month ago, South Korea's Fair Trade Commission had fined Intel $25.5 million on the same allegations. Three years ago, Japan's Fair Trade Commission had ordered Intel to eliminate discounts that the agency said kept AMD out of the market unfairly. Intel had decided to comply with the order without admitting any wrongdoing.

For its part, Intel's statement says that it is confident that ''the worldwide microprocessor market is functioning normally and is highly competitive in Europe and elsewhere.'' Intel insists that its conduct has been lawful, pro-competitive and beneficial to consumers, saying that it is ''confident that our response will show that the allegations in the SO are unfounded.''