Intel punishment could push up PC prices

 

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By Barry Collins and Reuters

Posted on 23 Apr 2009 at 13:50

The European Commission has taken a major step toward fining and imposing sanctions on Intel, which could result in higher PC prices.

The EC has sent a draft decision ruling against the chip maker to EU member states, a source familiar with the situation claims.

In the draft decision, the Commission claims Intel abused its market power in violation of EU antitrust law.

In addition to a fine, the EC could limit the activities of Intel in giving rebates to PC manufacturers.

In July 2007, the Commission said Intel designed its rebates to persuade computer makers to shut out AMD. One year later, the Commission said Intel had also given money to retailers who agreed to exclusively sell Intel-based PCs.

Any ban on rebates could push up the price of Intel-based PCs, if manufacturers/retailers aren't prepared to offset the losses themselves.

Intel says it's not commenting on proposed sanctions. "As far as we are concerned this is speculative at this stage and we have no comment," says spokesman Chuck Mulloy.

The sending of a draft decision is typically followed by a meeting within a week or two in which the individual members give their recommendations. Every draft decision of the Commission has been approved in the past.

Once a draft is approved, the members reconvene within days to approve a fine. In order to prevent leaks, the Commission does not put the size of the fine in a draft decision.