MUNICH; Germany EC antitrust regulators have concluded that Intel has abused its dominant position in the microprocessor market. The legal proceeding could end with a billion-euro fine for Intel, media reports here speculate.
In a statement of objections issued friday (July 27), the EU antitrust authority blames Intel of having infringed the EC antitrust rules in that the microprocessor giant had used practices aiming at excluding AMD as its main rival from the x86 market.
In its statement, the regulator accuses Intel of three types of abusing a dominant market position: First, Intel had provided 'substantial rebates' to several OEMs under the condition that they buy their microprocessors exclusively from Intel. Secondly, Intel paid to OEMs if they delayed or cancelled the roll-out of products based on AMD CPUs. Thirdly, Intel has offered microprocessors to server OEMs under cost in order to block the competitor.
While each one of these types of conduct is considered by the authority as an illegal act in its own right, the commission is considering that all three types of conduct are part of a single overall antit-competitive strategy, which could lead to a higher fine.
The conclusion is preliminary; Intel now has ten weeks to reply. The company also can be heard in an oral hearing. The statement has been delivered to Intel Thursday (July 26). The company informed through its general counsel that it declines the charges and that the commission had included several errors in its arguments.
"We are confident that the microprocessor market segment is functioning normally and that Intel's conduct has been lawful, pro-competitive and beneficial to customers", explained Intel counsel Bruce Sewell in a statement. "While we certainly have preferred to avoid the cost and inconvenience of establishing that our competitive conduct in Europe has been lawful, the commission's decision to issue a statement of objections means that at last Intel will have the opportunity to hear and respond to the allegations."
According to media reports, the commission can fine Intel with a sum up to 10 percent of the annual revenues. In 2006, the company had achieved revenues of roughly $35.8 billion. Against such a measure Intel would have the possibility to appeal in the courts.
AMD reacted to the EC findings with satisfaction. "This is a moment of truth for the entire IT industry", said AMD Europe president Giuliano Meroni in a press statement. "We are convinced that this move will speed opening of the global microprocessor market - and end users and PC vendors will benefit equally of it."