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Intel insists its innocence as it responds to antitrust allegations from the European Union

Intel revels in the glory of being the CPU industry leader, at least for the time being.  However, like many industry leaders, they have found themselves the primary target of the crosshairs of criticism.  Further, as with any company that is dominating the market, allegations of antitrust violations become a serious threat to the company worldwide. 

AMD said Intel's anti-competitive practices established a monopoly in the microprocessor market.  AMD then sued Intel in U.S. courts in June of 2005.  The company since mounted a long-standing legal battle that included ads in major newspapers and the a website chastising Intel who it portrays as sinister and monopolistic.

AMD received an ally in the form of the European Union.  In July 2007, it announced that based on evidence collected in a multi year investigation, including materials found in a June 2005 raid of European Intel offices, it was filing charges against Intel for engaging in anticompetitive practices.

Intel's senior vice president and general counsel Bruce Sewell issued a carefully worded statement soon after, firmly insisting his belief that Intel was innocent of wrongdoing in the European market.

The charges were supposed to receive a formal response from Intel by October 8, but the EU showed a bit of mercy, extending Intel's window to respond to January 4.

Last week the European Union granted Intel another small measure of leniency, allowing it to file the response to be filed on Monday January 7, instead of Friday, as dictated by the previous extension.

At last Intel issued a response to the European Union and telling the Union to "bring it on."  Intel's formal written response to the EU states not only its innocence, but also challenges EU regulators to hold a hearing to evaluate claims that it illegally used rebates to seize sales from AMD.

Despite Intel's feisty tone, Washington based antitrust lawyer David Balto, a
former U.S. Federal Trade Commission policy director, stated that Intel faces a nearly impossible challenge in proving its innocence to the EU.  He explains, "Intel is going to have a really significant challenge in the proceedings before the EU.  The EU is much more sensitive to the long-term competition effects by dominant firms and much less ready to accept simple snapshots of a company's conduct."

As per EU regulations Intel may be fined up to 10 percent of its annual sales for antitrust violations.   Microsoft initially tried to argue against the EU when it was hit with similar charges and the end result was a painful $690M USD fine.  Intel has even more to lose as it is constantly price cutting to stay competitive and has smaller profit margins, which force it to engage in yearly layoffs.

Intel is also under investigation in South Korea and Japan following raids in these nations. 

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RE: fines
By Spivonious on 1/8/2008 9:11:18 AM , Rating: 2
Who pays for the EU's lawyers? The taxpayers.

RE: fines
By misuspita on 1/8/2008 9:55:28 AM , Rating: 4
And if they find Intel guilty and fine them to hell, then they would have paid themself (the lawyers)

RE: fines
By masher2 on 1/8/2008 10:57:40 AM , Rating: 2
Antitrust laws, particularly in the EU, are written in a vague manner and open to a vast degree of interpretation. A cynic would say they're intentionally written so.

In any case, if the EU wants to find Intel (or any other industry-leader) guilty, they'll do so.

RE: fines
By Captain Orgazmo on 1/8/2008 9:48:05 PM , Rating: 1
The EU parliamentary and legal branches are dominated by Marxist ignoramuses. They are accusing Intel of anti-competitive behavior by charging too much. If anything, that is pro-competitive because it is price undercutting that hurts competitors. If Intel had instead done what government corporations (like the subsidized companies of Europe and Canada) do, and had killed its competition off, then maybe the EU would be happy?!

RE: fines
By ImSpartacus on 1/10/2008 4:30:30 PM , Rating: 2
If anything, that is pro-competitive because it is price undercutting that hurts competitors.

Prices cuts are not 'pro-competitive'. They're just the opposite. A trust (monopolizing company) uses its bank account to cut prices down so that their competition goes out of business.

If Intel had instead done what government corporations (like the subsidized companies of Europe and Canada) do, and had killed its competition off, then maybe the EU would be happy?!

Intel is currently killing off its competition...

RE: fines
By Captain Orgazmo on 1/12/2008 7:49:18 PM , Rating: 2
You need to read a little more carefully. The first point you made just reiterated my point. I said "it is price undercutting that hurts competitors". Intel has been accused of price fixing, which is impossible because they are not a monopoly, so any overcharging on their part can only help the competition. The only reason Intel is gaining market share is because they offer a better product than their only real competitor, AMD.

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