EU to throw book at Intel for anti-AMD tactics

 

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By Reuters

Posted on 11 May 2009 at 08:18

EU antitrust regulators are expected to rule this week that Intel illegally paid computer makers to postpone or cancel the launch of products containing chips made by rival AMD.

The European Commission is set to decide on Wednesday to fine the world's largest chipmaker and order changes to its business practices for what the EU executive sees as "naked restrictions" to competition.

There is no indication of how big the fine might be. The largest fine levied by the EC for an abuse of market dominance was the 497 million euros demanded from Microsoft in March 2004.

Sources claim the Brussels-based Commission is expected to rule that Intel committed two violations in which the firm abused its dominance of the CPU market.

The EU executive will say Intel gave rebates to computer makers to restrict or eliminate the use of chips made by AMD, and provided other inducements to retailers to sell only machines with Intel CPUs.

In its ruling the Commission will order Intel to end by a specific date those rebates which it deems to be illegal.

In its second finding, the Commission will say Intel paid PC makers to delay or scrap the launch of products containing AMD chips. The Commission will characterise the payments as "naked restrictions" to competition, the sources claim.

The Commission will state that the violations occurred during a period stretching back eight years.

In committing the first violation, Intel set percentages of its own chips that it wanted PC makers to use. For example, NEC Corp was told that 20% of its desktop and notebook machines could have AMD chips, the sources claim.

All Lenovo notebooks had to use Intel chips, as did relevant Dell products. The figure was 95% for HP's business desktops.

European Commission spokesman Jonathan Todd said the commission had no comment. Intel spokesman Chuck Mulloy, also declined to comment.

The EU executive charged Intel in 2007 over illegal rebates to computer makers. In July last year, it charged the firm with paying retailers not to sell PCs using AMD chips.

Intel has said repeatedly it has done nothing wrong.