TOKYO Intel Corp.'s Japanese unit has won a two-week extension to reply to allegations of antitrust violations.
The Japan Fair Trade Commission (JFTC) issued the antitrust recommendation to Intel K.K. on March 8, setting a March 18 deadline for Intel to respond. On Friday (March 18), Intel requested an extension until April 1 to "carefully examine the recommendation." JFTC approved the request.
JFTC's recommendation directs Intel K.K. to stop sales practices that it alleges shut out competitors from the Japanese microprocessor market.
JFTC has been conducting an antitrust probe against Intel since last April. The agency searched several locations, including Intel Japan's headquarters. It also interviewed two competitors and five major Japanese PC manufacturers: Fujitsu, Hitachi, NEC, Sony and Toshiba.
Intel, AMD and Transmeta supply virtually all microprocessors sold to PC manufacturers here, and non-Intel processors accounted for only 24 percent of the Japanese market in 2002. With Intel's rebates, the non-Intel share dropped to 11 percent in 2003, according to the agency's findings.
Intel has allegedly offered commissions to customers when they used only its processors or limited their use of non-Intel processors to less than 10 percent of their total orders. The JFTC alleges that Intel's sales tactics shut out competitors in the Japanese microprocessor market in violation of its antitrust laws.
Intel has until April 1 to accept or reject the recommendation. If it rejects the recommendation, an administative proceeding will begin at the JFTC. If the issue is not resolved by an JFTC judgement, it will be transferred to the Tokyo High Court.
Bruce Sewell, Intel's vice president and general counsel, denied the company's activities here harm Japanese consumers.
But a JFTC spokesman said Intel sales practices that exclude competitors harm consumers. Intel's pricing strategy is to offer microprocessors at the same or slightly higher prices than competitors'. If competitors are excluded from the market, Intel's incentive to lower prices vanish, harming consumers, the spokesman added.