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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: Backwards
By Zandros on 1/8/2008 12:25:25 PM , Rating: 2
AMD is no more European than Intel is Malaysian.

Anyway, what happened to the presumption of innocence? I find it absurd Intel having to prove they are innocent.

RE: Backwards
By pauldovi on 1/8/2008 12:48:47 PM , Rating: 3
We are talking about Europe. You are presumed to be guilty. You get your rights from your government....

"The New Europe, reminding you why your ancestors left the old one."

RE: Backwards
By Oregonian2 on 1/8/2008 9:29:35 PM , Rating: 2
Not quite true I think. AMD has 100% of it's high-end processor fab in Germany I think. If they lost that fab due to an earthquake they'd be dead meat. If Intel lost a fab in Malaysia it would not be good, but they'd not be dead meat, they'd just have a sore elbow.

P.S. - Yes, AMD has now multiple fabs in Germany, but I think they're next to one another.

RE: Backwards
By nofranchise on 1/10/2008 10:20:51 AM , Rating: 2
Who said Intel are innocent? If you've seen the evidence discovered by the EU's lawyers, please let us in on it. But to think the European Union would go to court in a case like this withouth hard evidence is a tad more absurd.

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
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