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Investigators crack down on illegal tactics against AMD

South Korean antitrust investigators fined Intel Corp. 26 billion won ($25 million), for illegal rebates and parts discounts to manufacturers on condition that they not buy from rival manufacturer AMD.

The fine, which closely mirrors the outcome of a similar antitrust investigation in Japan in 2005, makes Intel the second major global technology company to be disciplined by South Korea’s Fair Trade Commission, after Microsoft in December 2005.

Intel said it was displeased with the outcome of the order, and is considering appeal.

“We're disappointed and we completely disagree with the findings,” said Intel’s senior VP and general counsel Bruce Sewell.

South Korean officials hit Intel with antitrust charges last year, working from findings of a two-year investigation wrapped up last September.

Forbes called the rebates a “time-honored practice in the personal computer industry;” identical practices in Europe, the United States, and Japan have since landed the company in considerable hot water. Both European and American investigations are still pending.

In Europe, rumors of a “provisional decision” at the end of last month proved to be false, after European Commission officials dismissed a report that it had gathered sufficient evidence to enter a ruling. Despite that, the Commission promised an antitrust ruling against Intel “as soon as possible,” but refused to provide a specific timeline.

If antitrust rulings against Microsoft are any indication, Korea’s ruling against Intel will be a pittance against the kind of money that European investigators might fine. Antitrust investigations against Microsoft hit the company with a whopping $1.4 billion fine last February – compared to $32 million in South Korea – and EU antitrust rules allow for fines of up to 10 percent of annual sales.

Intel will wait for the dust to settle before it acts, it said, as the official outcome could take between 30 and 60 days and may change significantly during that time. The company can also opt to request reconsideration from the KFTC, or choose to seek a court ruling.

Regardless, Intel denied any wrongdoing with respect to its rebate practices.

“To ask us to cease and desist behavior which we are not doing and never have done is odd,” said Intel representative Nick Jacobs. “We don't use rebates in an anticompetitive fashion.”

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RE: How will this affect AMD?
By SilthDraeth on 6/5/2008 10:11:33 PM , Rating: 4
I was just thinking the same thing. Basically Company A treats Company B unfairly, so Government fines Company A. Government wins, Company A is still ahead because it made more than it was fined, and Company B is still bad off.

RE: How will this affect AMD?
By Regs on 6/6/2008 6:15:27 AM , Rating: 2
And fining intel 25 million is like giving Bill Gates a parking ticket. Though it looks bad in the eyes in the public, nothing another 100 million in PR can't fix.

RE: How will this affect AMD?
By JonnyDough on 6/8/2008 6:37:15 AM , Rating: 2
Yeah, so who gets the fine money? The government? It should go to those that were hurt...AMD and other manufacturers should be leading and acknowledged in this investigation if they are the primary victims here. Why the heck would the Korean government take it? They've nothing to do with this. I think governments sometimes WANT big corporations to do bad, so they can use seizing property as a form of taxation.

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