Intel plays foul in Europe

Intel plays foul in Europe

By SiliconIndia   |   Tuesday, 22 July 2008, 10:26 Hrs
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Brussels: In a foul play against its competitor, chipmaker Intel paid retailers not to sell PCs using chips made by the rival Advanced Micro Devices (AMD). The new accusation was made by European Union antitrust regulators.

The 'statement of objections' from the European Commission is an expansion of the 2007 charges that Intel gave computer makers rebates to limit their use of AMD chips or avoid them altogether.

The new accusation means the Commission is now weighing charges that Intel illegally fiddled with both the wholesale and retail channels in an effort to suppress its competitor.

"All the types of conduct reinforce each other and are part of a single overall anti-competitive strategy aimed at excluding AMD or limiting its access to the market," the EU's executive body said in a statement.

In the mid 2007, the commission had made three charges. Firstly, Intel had provided substantial rebates to a leading European personal computer retailer, conditioned on it selling only Intel-based PCs, the Commission also said Intel paid a PC maker to delay the planned launch of a product line incorporating an AMD-based central processing unit (CPU). And thirdly, it gave the same computer maker substantial rebates to encourage it to get all its CPUs for laptops from Intel, the Commission said.

Intel lawyer Steve Rodgers said that he was disappointed by the new charges, which centered on whether it was lawful or not to issue price discounts. "The result will be higher computer prices because it prevents Intel from offering discounts," he said.

Intel has its logo on four-fifths of the CPUs that run the world's one billion PCs, while AMD accounts for the rest.

The Commission could fine Intel, though any penalty would be unlikely to approach a cap of 10 percent of annual turnover. It could spoil the firm's reputation by labeling the company an unfair competitor.

Intel was given eight weeks to respond to the charges. It would study them in detail before responding to the Commission in writing.

However, Intel is repeatedly saying that it did nothing wrong.

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