SAN JOSE, Calif. Intel claims it has evidence that will refute the European Commission's conclusion that the company has engaged in anti-competitive business practices. However, Intel chief executive Paul Otellini declined to share any specifics of that evidence in a conference call about the case.
The European Commission charged Intel on Wednesday (May 13) with at least eight violations involving rebate payments to Acer, Dell, Hewlett-Packard, Lenovo, NEC and Media Saturn Holding, owner of the MediaMarkt retail chain. It levied a fine of US$1.45 billion against the processor giant, its largest fine to date, according to a Reuters report.
In a summary of its findings, the EC outlined specifics of the charges that included paying four OEMs for buying all or the vast majority of their CPUs from Intel. The EC also alleged Intel paid three OEMs to delay or restrict launches of PCs using processors from Advanced Micro Devices.
More details are expected shortly when the EC publishes on its Web site the complete 542-page document of its findings. The decision stemmed from complaints file by AMD in 2000, 2003 and 2006.
In its summary of findings, the EC said Intel did not state the terms of the rebate payments in its contracts. However, the EC said it "obtained proof of the existence of many of the conditions found to be illegal" from e-mails and testimony.
"There are no documents that show what they are alleging," said Otellini in a conference call with reporters. "These people picked up tens of millions of documents, but they couldn't find evidence of those deals and assumed they must be oral [agreements]," he said.
"There was evidence that refute what was claimed here," he added. "In some cases the OEMs made statements that these were not exclusive deals or [did not contain the] conditional terms [alleged by the EC, but] those documents were not allowed in the case file or were not used properly in making the decision," he added.
Otellini declined to provide details of the evidence supporting Intel. "Whatever we say will be in court," he said.
That won't happen anytime soon. Intel will appeal the EC decision but, "my sense is an appeal is two to three years out," Otellini said, depending on the details of the EC ruling which have not yet been published.
A separate case filed in Delaware between Intel and AMD is not scheduled to start proceedings until February 2010. Evidence in that case has been sealed.
Otellini said he was confident the decision would be overturned. "No third party has reviewed [the EC findings] and we believe when they do they will find we are within the law," he said.
In 2008, the Korea Fair Trade Commission levied a US$25 million against Intel in a similar decision. Otellini said the case was under appeal and expressed confidence of winning a reversal.
In 2005, the Japan Fair Trade Commission ruled that Intel had violated the country's anti-monopoly laws by illegally forcing full or partial exclusivity with five Japanese PC makers. Intel did not appeal the ruling.
"There was no admission of wrongdoing and no fine," Otellini said. "After three years of audits in Japan there were with no violations or additional comments," he added.
In the U. S., besides the Delaware case, the Federal Trade Commission and the New York Attorney General's office are investigating Intel for anti-competitive practices. "We have been investigated in the U.S. before and come out fine," Otellini said.
The ruling could "set a precedent for Intel in its anti-competition case with AMD," and put pressure on Intel to settle with AMD, said Tim Luke, an analyst with Barclays Capital wrote in a research report.
"Today's ruling is an important step toward establishing a truly competitive market," said Dirk Meyer, chief executive of AMD, speaking in a press statement.