EU alleges Intel abuse

27 Jul 2007

The European Commission has sent a Statement of Objections to Intel outlining the Commission’s preliminary view that the company has infringed EC Treaty rules on abuse of a dominant position.

The Commission contends that Intel aims to exclude its main rival AMD from the x86 computer processing units (CPUs) market.

In the SO, the Commission outlines its preliminary conclusion that Intel has engaged in three types of abuse of a dominant market position.

First, Intel has provided substantial rebates to various original equipment manufacturers (OEMs) conditional on them obtaining all or most of their CPU requirements from Intel.

Secondly, in a number of instances Intel made payments in order to induce an OEM to either delay or cancel the launch of a product line incorporating an AMD-based CPU.

Thirdly, in the context of bids against AMD-based products for strategic customers in the server segment of the market, Intel has offered CPUs on average below-cost.

These three types of conduct are aimed at excluding AMD, Intel’s main rival, from the market. Each of them is provisionally considered to constitute an abuse of a dominant position in its own right, the Commission said.

However, the Commission also considers at this stage of its analysis that the three types of conduct reinforce each other and are part of a single overall anti-competitive strategy.

Intel has 10 weeks to reply to the SO, and will then have the right to be heard in an oral hearing. If the preliminary views expressed in the SO are confirmed, the Commission may require Intel to cease the abuse and may impose a fine.

By Niall Byrne