South Korea Says “A-ni-yo” To Intel Practices

June 5, 2008

The South Korean antitrust ruling against Intel is seen as a portent of other pending lawsuits against the world’s largest chipmaker. Intel is facing antitrust challenges in jurisdictions around the world.

After a three-year investigation, The Korean Fair Trade Commission has fined Intel $25 million for abusing its dominant position in the microprocessor market and ordered the company to cease its illegal rebates to PC makers. This ruling comes on the heels of news that the European Commission (EC) plans to rule on the case by September.

Korea’s actions did not come as a surprise as authorities around the world are beginning to shed light on Intel’s habitual pattern of sophisticated anticompetitive behavior. Some major recent actions include:

  • In March 2005, Japan’s Fair Trade Commission concluded that Intel had violated the country’s anti-monopoly laws by illegally forcing exclusivity on five Japanese PC makers.
  • June 2005, AMD filed an antitrust complaint in U.S. Federal District Court for the District of Delaware under Section 2 of the Sherman Antitrust Act, Section 4 and 16 of the Clayton Act, and the California Business and Professions Code.
  • In July 2007, the EC charged Intel with abusing its dominant market position and maintaining its market share through illegal anticompetitive actions. The Commission stated in the accompanying press briefing that “in the short, medium and long-term, we think that the actions of Intel are bad news for competition and consumers.”
  • In January 2008, the New York State Attorney General launched an antitrust investigation of Intel. The AG served a “wide-ranging” subpoena seeking information on whether Intel penalized customers from using competitors products, improperly paid customers for exclusivity and illegally cut off competitors from distribution channels.

Today the Computer & Communications Industry Association praised South Korea for investigating this antitrust case that has serious implications for innovation and consumers.

“This decision is an important step toward opening up the computer chip market to fair and open competition,” said CCIA President and CEO Ed Black. “This is just one more note in the global drumbeat against Intel’s actions and comes as little surprise to followers of the case as worldwide scrutiny has intensified. Intel is an important and respected technology company, which need not rely on questionable or illegal practices to be successful. We are pleased antitrust authorities around the world have taken the lead in high-tech competition issues in recent years when U.S. enforcement has been less vigorous.”

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