EU Accuses Countries of Intel Bias

Four European countries stand accused of breaking strict public
procurement rules and adopting an excusive “Intel Inside” policy,
regulators said Tuesday.

France, the Netherlands, Finland and Sweden received letters, the European Commission said, accusing them individually of purchasing only Intel-based computers
and ignoring the EC’s mandated open bid process.

This is not the first time that the EU has sent letters asking about
Intel’s influence in the world. Officials send out a batch of similar
complaints in April 2004, following reports that Austria, Belgium,
Finland, France, Germany, Italy, and the Netherlands were cutting
exclusive deals.

The Commission said it based its latest argument on three variations
of an Intel bias: requirements to supply Intel microprocessors, “Intel
or equivalent” microprocessors, or microprocessors using a specific
clock rate.

“Reference to a specific brand would constitute a violation of
Directive 93/36/EEC on public supply contracts,” the EC said in its
complaint. “Merely specifying a clock rate is not sufficient for
assessing the performance of a computer.”

According to the EC complaint, local authorities in France solicited as many as a dozen bids for Intel-only microcomputers, servers or
workstations. The government in Amsterdam similarly requested bids on computers,
notebooks and monitors along with services that used “Intel or
equivalent” microprocessors.

Further north, the EC found the Universities of Jyvaskyla and Tampere
and Hame Polytechnic in Finland also solicited bids requiring Intel chips. In
Sweden, the Municipality of Filipstad and Chalmers University of
Technology had three separate contracts suggesting that the equipment
supplied must be fitted with Intel Pentium microprocessors. The national
police authority allegedly had a similar contract for laptops with Intel
Centrinos inside. The Uppsala regional authority also acquired computers
that had to have a certain clock speed that at the time only Intel could
supply, the EC said.

The countries named in the complaint now have two months to reply to
the accusations or face criminal charges.

EC spokesperson Anthony Gooch confirmed that the letters were sent to
national officials but declined to comment on whether the new round of
investigations was motivated by a ruling by a U.S. federal judge last

U.S. District Judge James Ware denied a request by AMD that Intel turn over internal documents so that AMD could forward the documents to the European Commission. The request came as part of a long-running
legal battle between the two companies. AMD accuses Intel of abusing its
position and violating anti-competitive rules around the world.

Intel executives were not available for comment.

Intel’s position is strong, with 80 percent of the market
for chips that run PCs and 90 percent of the revenue share worldwide. By
contrast, AMD has about 16.8 percent of the market and barely
registers in the double digits in worldwide revenue share.
Taiwan-based Via Technologies and Transmeta round out the top four.

According to documents in the U.S. District Court dispute between AMD and Intel, “Intel Inside” and other “market development fund” programs as loyalty
rebates to secure the agreement of PC makers and retailers to only sell
Intel-based PCs. The chipmaker also accused Intel of withholding its
technology as a coercion tactic and of forming private, standard-setting
cartels that exclude AMD and its interests.

But in his summary opinion, Judge Ware noted that AMD’s requests were
actually “unwanted and unlikely to be reviewed” by the EC. The judge
also noted that the EC itself had the power all along to ask Intel for
the documents but has yet to do so.

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