Intel wrist slapper

The European Commission believes that chip-maker Intel has infringed  EC treaty rules, abusing a dominant position to exclude its main rival AMD from the x86 processor market.

Yesterday, the EC sent a so-called 'Statement of Objections' (SO) to Intel that outlined its view that Intel has engaged in three types of abuse of a dominant market position.

Firstly, it claimed that Intel provided substantial rebates to various Original Equipment Manufacturers (OEMs) conditional on them obtaining all, or the great majority of, their microprocessors from Intel.

Second, in a number of instances, it says that Intel made payments to induce an OEM to either delay or cancel the launch of a product line incorporating an AMD-based microprocessor.

Third, it says, in bidding for strategic customers in the server segment of the market, Intel has offered CPUs below cost to win deals over its rival.

Each types of conduct is provisionally considered to constitute an abuse of a dominant position in its own right. However, the Commission also considers at this stage of its analysis that the behaviour is part of a single overall anti-competitive strategy.

Intel has 10 weeks to reply to the SO, and will then have the right to be heard in an oral hearing. If the preliminary views expressed in the SO are confirmed, the Commission may require Intel to cease the abuse and may impose a fine.

In response to the news, Intel issued a statement from Bruce Sewell, senior vice president and general counsel.

'We are confident that Intel's conduct has been lawful, pro-competitive, and beneficial to consumers. While we would 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 made by our primary competitor,' he said.

'The case is based on complaints from a direct competitor rather than customers or consumers. The Commission has an obligation to investigate those complaints. However, a Statement of Objections contains only preliminary allegations and does not itself amount to a finding that there has been a violation of European Union law. Intel will now be given the chance to respond directly to the Commission's concerns as part of the administrative process,' he added.