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European Commission rules against Intel in antitrust case
Statement of objections issued to Intel because of its ‘overall anti-competitive strategy aimed at excluding AMD’
Following a massive worldwide antitrust probe issued by AMD, the European Commission has issued a statement of objections to Intel over its competitive strategy, which the EC says was deliberately aimed at excluding AMD from the processor market.
So what sort of devious practices has Intel been dishing out on its competitors? Well, according to the EC, Intel has firstly ‘provided substantial rebates to a leading European personal computer (PC) retailer conditional on it selling only Intel-based PCs.’ As well as this, the EC also says that ‘Intel made payments in order to induce a leading Original Equipment Manufacturer (OEM) to delay the planned launch of a product line incorporating an AMD-based CPU.’ As a final note, the EC also added that ‘in a subsequent period, Intel has provided substantial rebates to that same OEM conditional on it obtaining all of its laptop CPU requirements from Intel.’
While the EC broke the allegations up into three separate components, it also says that ‘all the types of conduct reinforce each other and are part of a single overall anti-competitive strategy aimed at excluding AMD or limiting its access to the market.’ Understandably, AMD is pretty chuffed with the result. AMD's executive vice president, legal affairs and chief administrative officer, Tom McCoy, said that 'Intel has paid a leading retailer to turn away AMD-based computers from leading global computer manufacturers, which can only be regarded as robbing consumers of their fundamental right to choose.' He also added that 'no antitrust laws anywhere in the world permit Intel to pay retailers and computer manufacturers to boycott non-Intel products.'
However, Intel still stands by its position that it’s done nothing wrong. In a response to the statement of objections, Intel says that ‘the Commission supports AMD’s position that Intel should be prevented from competing fairly and offering price discounts which have resulted in lower prices for consumers.’
Intel added that it was ‘confident that the worldwide microprocessor market is functioning normally and is highly competitive in Europe and elsewhere.’ Intel also insisted that its ‘conduct has always been lawful, pro-competitive and beneficial to consumers.’ The benefit of the competitive market, according to Intel is that ‘consumers have benefited from prices that have gone down significantly, output has increased many times over, and the performance of products, including ours, has improved exponentially.’
This isn’t the first statement of objections against Intel to be issued by the European Commission. The first was issued on 27 July 2007, and noted similar objections to Intel’s competitive practices.
AMD has been pursuing a worldwide antitrust suit against Intel for many years now, and detailed a lot of its issues with Intel when it made an antitrust complaint against Intel in the US in 2005. The accompanying document made for some juicy gossip, including Gatweway executives recounting that ‘Intel’s threats beat them into “guacamole”, as well as Compaq’s CEO, Michael Capellas ‘reporting that “he had a gun to his head,”’ and informing an AMD executive ‘that he had to stop buying AMD processors.’ Another allegation was that ‘Intel paid Sony multimillion dollar sums, disguised as discounts and promotional support, in exchange for absolute microprocessor exclusivity.’ AMD sensationally concluded that ‘Intel has resorted to old-fashioned threats, intimidation and “knee-capping” to deter OEMs from dealing with AMD.’
