Monday, March 15, 2010

Intel Anti-competitive allegations by regulatory bodies

Japan

In 2005, the local Fair Trade Commission found that Intel violated the Japanese Antimonopoly Act. The commission ordered Intel to eliminate discounts that had discriminated against AMD. To avoid a trial, Intel agreed to comply with the order


European Union

In July 2007, the European Commission accused Intel of anti-competitive practices, mostly against AMD.[88] The allegations, going back to 2003, include giving preferential prices to computer makers buying most or all of their chips from Intel, paying computer makers to delay or cancel the launch of products using AMD chips, and providing chips at below standard cost to governments and educational institutions.[89] Intel responded that the allegations were unfounded and instead qualified its market behavior as consumer-friendly.[90] General counsel Bruce Sewell responded that the Commission had misunderstood some factual assumptions as to pricing and manufacturing costs.[91]

In February 2008, Intel stated that its office in Munich had been raided by European Union regulators. Intel reported that it was cooperating with investigators.[92] Intel faced a fine of up to 10% of its annual revenue, if found guilty of stifling competition.[90] AMD subsequently launched a website promoting these allegations.[93][94] In June 2008, the EU filed new charges against Intel.[95] In May 2009, the EU found that Intel had engaged in anti-competitive practices and subsequently fined Intel €1.06 billion ($1.44 billion), a record amount. Intel was found to have paid companies, including Acer, Dell, HP, Lenovo and NEC,[96] to exclusively use Intel chips in their products, and therefore harmed other companies including AMD.[96][97][98] The European Commission said that Intel had deliberately acted to keep competitors out of the computer chip market and in doing so had made a "serious and sustained violation of the EU's antitrust rules".[96] In addition to the fine, Intel was ordered by the Commission to immediately cease all illegal practices.[96] Intel has stated that they will appeal against the Commission's verdict

South Korea

In September 2007, South Korean regulators accused Intel of breaking antitrust law. The investigation began in February 2006, when officials raided Intel's South Korean offices. The company risked a penalty of up to 3% of its annual sales, if found guilty.[99] In June 2008, the Fair Trade Commission ordered Intel to pay a fine of $25.5 million for taking advantage of its dominant position to offer incentives to major Korean PC manufacturers on the condition of not buying products from AMD

United States

New York started an investigation of Intel in January 2008 on whether the company violated antitrust laws in pricing and sales of its microprocessors.[101] In June 2008, the Federal Trade Commission also began an antitrust investigation of the case.[102] In December 2009 the FTC announced it would initiate an administrative proceeding against Intel in September 2010.[103][104][105][106]

In November 2009, following a two year investigation, New York Attorney General Andrew Cuomo sued Intel, accusing them of bribery and coercion, claiming that Intel bribed computer makers to buy more of their chips than those of their rivals, and threatened to withdraw these payments if the computer makers were perceived as working too closely with its competitors. Intel has denied these claims.

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