Intel's got some 'splaining to do
Intel's legal team will be very busy for the next 10 weeks.
That's how long the world's largest chipmaker has to come up with an explanation for business practices that the European Commission has declared "abuse of a dominant market position." The Directorate-General for Competition on Thursday sent Intel a "statement of objections," which sounds like a polite way of doing business but is quite serious.
The EC cited three examples of objectionable conduct after it investigated Intel's practices and the European PC market at the request of AMD. First, it said Intel offers "substantial rebates" in order to get PC companies to use Intel's chips, and not AMD's, in its products. It expanded that charge to include payments allegedly made by Intel to delay or scuttle the launch of AMD-based PCs in Europe. And it also said that Intel has sold server processors below cost in order to hamper AMD's business.
"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. 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," the EC said in a press release Friday.
Now Intel has to prove that it either didn't do those things, or that the EC is misinterpreting Intel's business practices, said Bruce Sewell, Intel's general counsel and a senior vice president at the company. Intel does provide rebates to customers, but it argues that the rebate program doesn't run afoul of any fair competition laws. The company also thinks that its costs may not have been calculated correctly in this particular assesment.
But the burden is now on Intel to come up with a satisfactory explanation for its behavior. It will be interesting to see if AMD is able to use any decision against Intel in Europe as part of its antitrust case winding its way through a court in the lovely state of Delaware.
It's not clear that AMD would be allowed to present the results of a European decision in a U.S. courtroom, but it will presumably do its best to do so should the EC find against Intel. Intel has already suffered a legal blow in Japan, and if a similar result is found in Europe, it could be hard to prevent a U.S. court or the Department of Justice from taking a very close look at Intel's conduct here.
Intel has 10 weeks to submit a formal response in writing, and then the EC will either agree with Intel and remove the objections, ask for more information, or find against Intel and levy fines and sanctions. Stay tuned.
Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom. 
better than AMD processors. Everywhere I go, I always see Intel
chips and products, never AMD. AMD makes horrible laptop
processors (so I've heard) and is usually the second choice by
customers who are looking to spend less. I would think that
Intel wouldn't need to violate anything to keep AMD's profits low
because Intel sells so many things for more money (at least
that's what you'd see on PC or Mac vendors websites). This
makes no sense.
Of course I have always used Intel and never have looked into
AMD stuff, so I am giving a biased opinion (LOL). AMD is good
in their own right, and I would use their products if their laptop
processors weren't as slow as people have told me.
Intel, what's going on?