Intel Responds to EU Charges With Demands of Its Own
January 7, 2008 11:43 PM
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.
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
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
in these nations.
"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson
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