European Antitrust Regulators Raid Intel, Computer Retailers in Competition Probe
By AOIFE WHITE | Associated Press | Feb 12, 08 9:44 AM CST in
Technology
European Union antitrust regulators raided Intel Corp. and computer retailers on Tuesday searching for evidence that the companies may have broken rules to assure competition in the market for computer chips, the European Commssion said.
Intel spokesman Chuck Molloy confirmed that the company's Munich office in Germany had been raided and the company would cooperate closely with the investigation. Europe's largest consumer electronics retailer, Germany-based Media Markt, said it was also raided.
The world's biggest chip maker is already facing formal EU charges of monopoly abuse for below-cost customer rebates and pricing that the EU says undercut smaller rival Advanced Micro Devices Inc.
The EU said the surprise inspections were a first step in its investigation _ indicating it may be considering a new set of charges into separate allegations. It said there was no strict deadline for deciding whether to file charges or drop the case.
EU fines can go as high as 10 percent of a company's yearly global revenue. Last year, Intel's revenue amounted to $6.98 billion.
Intel, based in Santa Clara, Calif., sells more than three-quarters of all microprocessors that act as the brains of computers using Microsoft Corp.'s Windows operating system.
AMD claims Intel's dominance is bolstered by behavior that unfairly shuts out competitors.
The EU first took formal moves against Intel last July _ six years after it first started looking at the company _ alleging that it gave "substantial rebates" to computer makers for buying most of their x86 central processing units, or CPUs, from Intel.
The EU executive also said Intel made payments to manufacturers to get them to delay or cancel product lines using AMD chips and that it sold its own chips below average cost to strategic server customers _ such as governments and universities _ when bidding against AMD-based products.
Below-cost or predatory pricing may be good for shoppers in the short term but, in the EU view, it ultimately harms them by killing off rivals that would offer more choice and set a faster pace for innovation.
EU officials also looked at whether Intel had urged Media Markt not to sell computers using AMD chips. The chain, which is owned by German retailer Metro AG, has more than 360 stores in Germany, France, Belgium, Austria, Switzerland, Poland, Hungary, the Netherlands, Italy, Spain and Greece.
Intel shares rose 13 cents to $20.81 in morning trading Tuesday, while AMD shares rose 7 cents to $6.35.
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