Intel Under EC Microscope Again

European antitrust regulators are again asking questions about Intel’s
alleged bully tactics with PC makers, the company said
Tuesday.

The new inquiry piggy-backs on reports in April 2004 that seven
countries — Austria, Belgium, Finland, France, Germany, Italy and the
Netherlands — ignored a European Commission (EC)-mandated, open-bidding process in favor of
exclusively purchasing Intel-based computers.

Sources talking to Reuters reported the EC was sending letters to its
list of PC makers asking again about accusations of serious repercussions if
OEMs did not use Intel chips.

The news also comes at the same time that Microsoft filed its appeal
of the European Union’s $613 million antitrust ruling. The same EC
investigators are involved with both cases.

While the EC has yet to take legal action, more governments are probing
Intel. So far, trade officials in North America, Europe and Japan have
questioned Intel’s sphere of influence. In April, Japan’s Fair Trade
Commission took documents in an unannounced visit to three Intel offices in
Tokyo.

Intel said the EC matter is an extension of a 2001 inquiry into the Santa
Clara, Calif.,-based chipmaking giant’s business practices following
complaints from rival AMD . That complaint went before the
EC, and it accused Intel of abusing its dominant
position in the Windows-capable microprocessor market and violating
anti-monopoly rules (Article 82) in Europe.

Intel General Council Chuck Mulloy told internetnews.com the
company has been cooperating with the EC over the past three years and
expects to continue to do so.

“Given Intel’s size and our success in certain market segments, it is not
unusual for regulators to look into our business practices,” Mulloy said.
“Intel has a rigorous antitrust compliance program. The program was
initiated in the mid 1980s and has been significantly enhanced over time.
While we can’t give you specific details of the program, we can tell you
that its purpose is to ensure that Intel complies with both the letter and
the spirit of antitrust laws worldwide. All sales, marketing and management
staffs undergo regular training to ensure legal compliance.”

Intel’s position in the world is huge holding 80 percent of the market for
chips that run personal computers and 90 percent of the revenue share worldwide.
By contrast, AMD has about 16.8 percent of the market share and barely
registers in the double digits when it comes to worldwide revenue share.
Taiwan-based Via Technologies and Transmeta round out
the top four.

The U.S. Supreme Court is also reviewing the Intel/AMD case. If the
Justices side with Intel, the No. 1 chipmaker won’t have to reveal personal
patent documents to AMD and the EC about its processors. If AMD succeeds, it
could set a precedent for a wider range of discovery in cases outside of the
U.S.

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