October 13, 2004 9:19 AM PDT
EU takes aim at Intel--again
The European Commission, the executive arm of the EU, said Wednesday that it has asked Finland, France, the Netherlands and Sweden for information on the requirements they have set when seeking computer equipment from vendors. This move expands the investigation beyond Germany and Italy, which received formal requests for more information in March.
"The Commission has decided to send letters of formal notice to France, Finland, the Netherlands and Sweden on the grounds that there is reason to believe that authorities in those countries describe the technical characteristics of the computers they wish to acquire in a discriminatory fashion," the Commission stated.
Government agencies from those four countries have allegedly asked for one, or some, of the following when looking to purchase computers: Intel microprocessors, Intel or equivalent chips, or microprocessors that use a specific clock rate.
Under European law, government agencies are prohibited from naming a specific brand, unless it is impossible to otherwise describe a technology. And although government agencies are allowed to describe the performance they are seeking from a particular piece of equipment using benchmarks, the Commission does not believe listing only clock speed is appropriate.
The formal letters are the first stage of the examination; the four member states have two months to reply. If the Commission finds any of the responses unsatisfactory and believes that European procurement laws were broken, the regulators can ask the appropriate member states to rectify the irregularities in the contract awards.
However, if the member states fail to amend the contracts, the Commission can take the case to the European Court of Justice.
An Intel representative said that the inquiry doesn't directly involve the chipmaker.
"We are not a direct party," said spokesman Chuck Mulloy. "The Commission is looking at how these government agencies bid on computers and how they specify things to the (original equipment manufacturers). This investigation does not directly involve Intel."
The Commission alleges that France sent out about 12 procurement requests to computer vendors, asking for PCs, servers and workstations with Intel, or equivalent, chips and a clock rate above a specific minimum level, which would favor Intel chips.
European regulators alleged that, in the Netherlands, the city of Amsterdam and a consortium of contracting authorities called the IGEA Group were looking to purchase computers with Intel, or equivalent, chips and microprocessors with a specific clock rate.
The Commission alleged that Finnish universities Jyvaskyla, Tampere and Hame Polytechnic each put out procurement bids for computers that specifically called for Intel, or equivalent, chips.
The Swedish city of Filipstad and Chalmers University of Technology, regulators allege, issued three separate bids for computers that specifically asked for Intel Pentium processors. The member state's national police authority, meanwhile, allegedly asked vendors to submit bids for laptop computers that were specifically equipped with Intel Centrino technology or the equivalent, while the Uppsala regional authority sought computers with a specific clock speed, the Commission alleged.
Both Germany and Italy have already replied to the Commission, which is now reviewing their responses.
Intel competitor Advanced Micro Devices applauded the Commission's announcement.
"Open (bidding) is good for everyone. It fuels competition and ensures public agencies get value for their money," said Mike Simonoff, an AMD representative. "Today's announcement confirms the EU is committed to a level playing field. We have never sought preferential treatment. We always wanted just a level playing field with no special treatment."
The European Commission announced in June that it would revisit its earlier investigation into Intel's business practices.
A representative for the Commission declined to comment on the status of that investigation.
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