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Intel chief fights EU antitrust charges

12 March 2008, 01:33 CET
Intel chief fights EU antitrust charges

Paul Otellini, president and CEO of Intel Corp. - Photo Intel

(BRUSSELS) - Intel brought out the big guns Tuesday to defend the world's largest microchip maker against EU antitrust charges, with chief executive Paul Otellini in Brussels for a hearing with European regulators.


Intel has two days, at a closed-door hearing starting Tuesday, to fight charges from the European Commission that the Santa Clara, California-based company abused its dominant position in the microchip market.

If Intel is unable to convince regulators of its innocence, Europe's top competition watchdog can order the company to change its business strategy and slap huge fines on it.

After a six-year investigation, the commission accused Intel in July of offering "substantial" rebates to computer makers that mostly used its chips.

Europe's top competition watchdog also alleged that Intel had made payments to clients to delay or cancel products using chips made by its US rival Advanced Micro Device, and selling its own chips at below cost in some cases.

"We hope to convince the commission that the microprocessor market is competitive and is behaving as one would expect a competitive market to behave," Intel spokesman Chuck Mulloy told AFP before the hearing got under way.

AMD executive vice president of legal affairs Thomas McCoy was in Brussels to square off against Intel at the hearing.

"Intel cannot avoid facing up to its illegal behaviour," AMD spokesman Jens Drews told AFP, adding that Intel "has systematically curbed competition, slowed the pace of innovation and harmed consumers everywhere."

AMD, the second biggest computer chip maker, has long accused Intel of using its grip on the market for microchips -- the brains of personal computers -- to choke off competition.

Intel's central processing units make up the computing power behind 80 percent of the world's personal computers while AMD controls about 17 percent.

The BEUC European consumers association, which participated in the hearing, stressed that the outcome of the case should serve consumer interests although it had so far not taken sides.

"We want to ensure that consumer interests are fully taken into account in competition policy in general and in its enforcement in the computer sector in particular," BEUC director general Monique Goyens said in a statement.

The association said that the Intel case was important because of the ubiquitous nature of computers and because if consumers were paying to much for microchips it would have a knock-on effect on other business costs and therefore consumer prices.

Last month, EU regulators widened their antitrust case against Intel by raiding its German offices as well as major computer retailers in Britain, France and Germany looking for further evidence that the company had abused its dominant market position.

However, that separate investigation is not due to be addressed at the hearing on Tuesday and Wednesday.

Apart from the EU case, Intel also faces an antitrust investigation in the United States.

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.




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