BRUSSELS, Belgium(AP)
European Union regulators have expanded their antitrust case
against Intel Corp., claiming that the world's largest
semiconductor maker has deliberately squeezed rival AMD out of the
chip market.
The European Commission said Thursday it has added three new
charges against Intel, warning that it may order Intel to change
its behavior under threat of large fines that can total 10 percent
of its global revenue. Intel's 2007 sales were $38 billion.
Intel said the new charges did not reflect any major change to
the first group sent in July 2007.
The company said in a statement that its conduct "has
always been lawful, pro-competitive and beneficial to
consumers." It claimed that the EU seemed to be supporting
AMD's view that Intel should stop price discounts that have
lowered prices for customers.
"This is still just the EU doing what the EU does _ it
hasn't changed our posture with respect to Europe,"
Intel's general counsel, Bruce Sewell, said in an interview
with The Associated Press. "This doesn't change our
exposure. It's just more of the same."
Advanced Micro Devices Inc.'s vice president of legal
affairs, Tom McCoy, said the latest charges reinforce AMD's
long-standing allegation that Intel is "robbing consumers of
their fundamental right to choose."
"No antitrust laws anywhere in the world permit Intel to
pay retailers and computer manufacturers to boycott non-Intel
products," McCoy said in a statement.
Intel, based in Santa Clara, Calif., sells more than
three-quarters of all microprocessors that run computers using
Microsoft Corp.'s Windows operating system. AMD is its only
real rival.
The EU regulators accused Intel of giving a major personal
computer retailer _ Germany's MediaMarkt AG _ substantial
rebates in return for it selling only Intel-based computers.
It said Intel also paid a manufacturer to delay an AMD range of
x86 central processing units, or CPUs, and gave rebates to the same
company in return for buying all its laptop CPUs from Intel.
The EU said all Intel's behavior was part of a coordinated
strategy to exclude AMD or limit its access to the market. Intel
has eight weeks to respond and can seek a hearing to put its
defense to European regulators.
Regulators have previously accused Intel of selling chips below
average cost to strategic server customers _ such as governments
and universities _ when bidding against AMD-based products.
The EU said below-cost or predatory pricing may be good for
shoppers in the short term but ultimately harms them by killing off
rivals that would offer more choice and set a faster pace for
innovation in the long term.
Officials claimed last year that Intel's abusive behavior
started in 2003 _ two years after the EU opened an antitrust probe
triggered by an AMD complaint _ and went on for approximately three
years, the Commission said.
That covers a period when AMD managed to take market share from
Intel after the 2003 launch of microprocessors that outperformed
Intel's chips. Intel fought back successfully in 2006 by
rolling out its core microprocessors.
In the EU's view, the problem is pricing, not market share.
Under each of the three charges Intel would be breaking antitrust
law by unfairly shutting out AMD from the market, the EU said.
Together each action reinforced the others to form a "single
overall anticompetitive strategy" that damaged the rules of
fair play, the commission said.
It says AMD, based in Sunnyvale, Calif., took its complaints to
regulators because it had not managed to win in the marketplace.
AMD has racked up more than $4 billion in losses over the last six
quarters and is cutting 1,600 workers, or 10 percent of its global
work force.
The U.S. Federal Trade Commission in June asked both companies
to supply information on possible antitrust problems in the
microprocessor market.
South Korean regulators fined Intel $25.4 million last month,
saying the semiconductor giant had used hefty rebates to persuade
Samsung Electronics Co. and other South Korean computer makers not
to use AMD-made CPUs.
AMD also has filed a civil lawsuit against Intel in U.S.
District Court in Delaware that is scheduled to go to trial in 2010
and could mean billions of dollars in damages if AMD wins.
Intel has repeatedly denied breaking any laws.
Intel shares rose $1.08, or 5.2 percent, to $21.99 in New York.
AMD shares rose 24 cents, or 4.7 percent, to $5.30.
___
AP Technology Writer Jordan Robertson in San Francisco
contributed to this report.
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