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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 eye smite on 1/8/2008 5:59:42 PM , Rating: 2
Well lets keep it simple. Allegations were made that intel told certain manufacturers of computers that they would not get discounted cpu's from intel unless they exclusively sold intel's in their systems. I don't know if that's true or not, if memory serves this and other claims were made against intel end of 2k5 first of 2k6. But then in 2k7, all of a sudden Dell and Toshiba started selling amd's in their systems, and omg at Walmart to boot. Is that just coincidence or am I grasping here?

RE: Backwards
By Ringold on 1/8/2008 6:42:49 PM , Rating: 1
I went to a resteraunt last night, asked for a Diet Coke. All they had was Diet Pepsi.


Also note how certain events and some retailers are exclusive to one credit card provider or another.

Intel in my mind would just be copying other industries ideas.

As far as Dell offering AMD chips goes, my understand was that those who did offer AMD chips still didn't see them fly off the shelves when AMD had the performance advantage. Dell not selling them might look bad but I don't know how much material damage it really constituted. A consumer who desired a computer with an AMD processor could easily browse to another website that did offer them.

RE: Backwards
By eye smite on 1/8/2008 6:50:59 PM , Rating: 3
Well what I'm saying is the allegations wouldn't play anything in my mind but accusations with little or no proof to be shown. However, with Dell and Toshiba suddenly offering amd cpu's at a time when intel was clearly on top with core 2 makes me question why. I don't see this as just a coincidence of timing, to me this gives that much more weight to the accusations against intel of strong arming exclusivity at certain system manufacturers.

RE: Backwards
By Ringold on 1/8/2008 7:13:03 PM , Rating: 2
You may be right. Thankfully, Intel slammed the ball back in their court and are daring them to shoot back.

If nothing else, this might prove to be high entertainment!

RE: Backwards
By eye smite on 1/8/2008 7:17:19 PM , Rating: 3
Yeah I don't think intel had much choice. If they wanted to be a clear winner again, they had to come out with something comletely different, cause the P4 wasn't taking them anywhere fast.

RE: Backwards
By ghost101 on 1/9/2008 11:34:54 AM , Rating: 2
It depends on the market share of each company. But if Pepsi did this at any large scale, yes Coca-cola can lodge a complaint for it to be investigated.

As for the credit card exclusivity, if events/retailers are paid off for exclusivity and the credit card company in question has significant market power again if any firm lodges a complaint with some evidence it will be investigated.

RE: Backwards
By eye smite on 1/9/2008 3:50:03 PM , Rating: 3
I don't think either one of us were looking for commentary on soda's or credit cards. He was using them as an example and they aren't a comparitive situation to the intel accusations seeing as we're talking about amd and intel, 2 companies. CC and soda companies are numerous and won't be accused of strong arm tactics for exclusitiy like intel has been. So.........we're talking apples, the oranges need to be left out or commented on in the xbox section.

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)
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