CCIA To Monitor Results, Actions From Expanded Intel Antitrust Investigation

BY CCIA Staff
July 17, 2008

European regulators have filed new antitrust charges against Intel today. The European Commission’s Directorate-General for Competition confirmed today that it had sent Intel a supplementary Statement of Objections (SSO) outlining its preliminary conclusion that Intel has engaged in three additional elements of abusive conduct. These new charges accuse Intel of providing rebates to a prominent European computer retailer conditional on them only carrying Intel products, providing rebates to a leading computer manufacturer to delay the launch of an AMD-based product line, and providing rebates to the same computer manufacturer for stocking their laptops exclusively with Intel-based products.

Intel is already under investigation by European regulators on charges it used rebates to discourage computer makers from using AMD chips in personal computers and low-cost servers. The EC had said earlier it would rule on those charges by September, though Intel will have two months to respond to these additional allegations. In the United States, Intel faces a civil suit in New York and a Federal Trade Commission investigation on whether the rebates were illegal. Intel has faced penalties in South Korea and Japan after being found guilty of using similar anti-competitive tactics.

“While it is fair and necessary to fine wrongdoers, what is more critical is that they be compelled to cease their anti-competitive behavior. Remedies must focus on establishing a fair marketplace, and this needs to happen before competition is extinguished because the dynamics of this market make entry by new competitors extremely unlikely,” said Ed Black, President & CEO of the Computer & Communications Industry Association. “There is now a clear pattern of ongoing and durable anti-competitive practices by Intel which needs to be halted.”

“The European Commission has the reputation of being thorough yet fair,” Black said. “Their judgment and findings will be very important because they will move us beyond current rhetoric and shed light on what is actually happening on many different levels. We will be interested in the results of this expanded investigation, and are hopeful it leads to actions that ensure fair, market-driven competition in this critical high-tech sector.”

“These new allegations involving retailers and manufactures are serious because if true, they would negate Intel’s previous arguments that its rebates to computer manufacturers helped consumers because they kept computer prices low,”Black said.

“Intel recently beefed up its Washington lobbying office. The speculation is the company did this in hopes of mitigating what are likely to be a string of legal defeats involving its anti-competitive practices,” Black said.

“Beyond the Intel case it is now obvious that many major tech companies are finding that antitrust matters are significantly impacting them one way or another, as illustrated by the more serious attention they are getting from regulators,” Black said.

 

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