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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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By twnorows on 1/8/2008 1:34:20 PM , Rating: 0
This should have been the MICROSOFT (and Intel) RESPONSE:
<p>

Previously, Europe's Regulators (i.e., political shakedown artists) started beating up Microsoft for bringing tremendous value to people and companies around the world at the lowest possible prices cannot be tolerated.
<p>

However, I believe there is a better solution. I suggest that Microsoft and Intel use the following strategy:
<p>

Microsoft and Intel should issue a statement that they are starting a "Data Cartel" and will no longer sell its technology or products to countries or governments that insist on trying to run Microsoft or Intel (how would these governments react if Microsoft and Intel insisted on running *their* country?).
<p>

Microsoft and Intel will serve them with notice that they have been placed on "Data Probation" for one year - after which their status will be reviewed and may or may not result in a reinstatement of their purchasing "privileges".
<p>

Microsoft and Intel can immediately put the entire European continent at a technology competitive disadvantage for a year by withholding its products from the European market.
<p>

Further, they can use the media to state that Eurobusiness is being disadvantaged because some neo-cheating politicians wanted to glorify their egos by resorting to extortion and arm twisting. How long do you think it will be before there is a HUGE cry to oust these evil politicians?
<p>

All Microsoft needs to do is block phone calls from *Euro-peeing* customers who are trying to activate their products. It will take no time at all before the problem gets fixed.
<p>

The Eurobusinesses will immediately see that unless they back off from "assaulting" Microsoft and Intel, they will quickly become a collection of second-class countries (not that they already are) because they are being denied current technology to use - and to develop for.
<p>

And as far as the arm-twisting by the U.S. Government goes:
<p>

I also encourage Microsoft to put a "stealth" feature into outlook so that all government organizations (.gov) will covertly "CC" all their messages to Microsoft corporate HQ. I think it would be healthy to have non-governmental documented oversight of what's going on in Washington, don't you agree?
<p>

Further, the next time the wackos in the U.S. Congress start leaning, Microsoft should just reply by reminding them that Canada (with more favorable tax breaks) is just a few miles away. And if Microsoft has to relocate because of political hostilities and lawful abuse, then it will give priority shipping to ALL its products to the Chinese market - and just stop shipping to the U.S. markets.
<p>

Even the smallest cat has fangs and claws that can be used effectively. I believe that Microsoft should take off the gloves and draw blood from those who are trying to victimize them. It's called Self-Defense.




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