Monday, May 11th 2009
EU Completes Intel Antitrust Case Investigations, Likely to Find it Guilty: Sources
The European Union trade regulatory body is expected to announce its verdict on the high-profile antitrust case against Intel on Wednesday. The company has been booked under charges relating to market malpractice, by influencing computer hardware manufacturers to postpone and/or cancel launches of their products that use CPUs made by its rival AMD. Intel allegedly abused its market position in the CPU industry, to cripple the growth of AMD in Europe, by offering special rebates to computer hardware manufacturers to restrict or eliminate the use of AMD processors. The company allegedly even influenced retailers by offering inducements to sell computers only with Intel processors installed.
The first violation by Intel is that it allegedly set set percentages of its own chips that it wanted PC makers to use, according to sources. Examples include NEC, which was told that only 20 percent of its products could use AMD processors. All Lenovo-made notebooks use Intel processors, while 95% of HP's product-line features Intel processors, sources said.
The second violation was where Intel bribed PC makers to delay or scrap the launch of their products that feature AMD processors, to favor Intel best. The Commission will characterize the payments as "naked restrictions" to competition, the sources said.
When found guilty, the commission will take two forms of action against Intel. A date will be set, following which, Intel cannot offer the rebates and other inducements EU finds illegal. A fine will also be collected from Intel. The commission can charge as much as 10% of Intel's annual revenue as fine, which was $38 Billion in 2008. The trade commission's decision set for Wednesday is said to be extremely complex and lengthy, in order to safeguard the antitrust enforcer against any possible legal challenges from Intel, which is likely to face one of the highest fines in Europe's antitrust history, according to Brussels-based lawyers. Intel's trouble in Europe began in 2000, when AMD complained that Intel was blocking its access to the European market.
Sources:
Reuters, The Wall Street Journal
The first violation by Intel is that it allegedly set set percentages of its own chips that it wanted PC makers to use, according to sources. Examples include NEC, which was told that only 20 percent of its products could use AMD processors. All Lenovo-made notebooks use Intel processors, while 95% of HP's product-line features Intel processors, sources said.
The second violation was where Intel bribed PC makers to delay or scrap the launch of their products that feature AMD processors, to favor Intel best. The Commission will characterize the payments as "naked restrictions" to competition, the sources said.
When found guilty, the commission will take two forms of action against Intel. A date will be set, following which, Intel cannot offer the rebates and other inducements EU finds illegal. A fine will also be collected from Intel. The commission can charge as much as 10% of Intel's annual revenue as fine, which was $38 Billion in 2008. The trade commission's decision set for Wednesday is said to be extremely complex and lengthy, in order to safeguard the antitrust enforcer against any possible legal challenges from Intel, which is likely to face one of the highest fines in Europe's antitrust history, according to Brussels-based lawyers. Intel's trouble in Europe began in 2000, when AMD complained that Intel was blocking its access to the European market.
82 Comments on EU Completes Intel Antitrust Case Investigations, Likely to Find it Guilty: Sources
And be honest, what bureaucratic body isn't greedy? They all are, including the EU.
At least, this is the way it is in most of the English-speaking world.
Do you think you have a better way?