Get more Mail & Guardian
Subscribe or Login

EU says Intel tried to squeeze out AMD

The European Union’s top antitrust regulator has charged that Intel tried to use its huge market share to push smaller rival Advanced Micro Devices (AMD) out of the central processing unit business.

The two companies make all the chips at the processing heart of the world’s one billion personal computers and servers, but Intel has about 80% of the business.

The European Commission, in its latest antitrust case to involve a technology giant, alleged Intel broke EU law ”with the aim of excluding its main rival, AMD, from the x86 computer processing units (CPU) market.”

X86 is the designation for the chips.

Intel’s general counsel said the company had followed the law and said the commission had included some errors in its charge sheet.

”We are confident that the microprocessor market segment is functioning normally and that Intel’s conduct has been lawful, pro-competitive, and beneficial to consumers,” Bruce Sewell said in a statement.

The EU executive sent the charges to Intel on Thursday and made the details public on Friday, saying the company had committed three types of antitrust violation.

”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,” its statement said.

Abuse charges

The commission said the three abuses were:

  • Intel provided conditional rebates to computer makers so long as they agreed to obtain most or all of their CPU chips from Intel.

  • Intel made payments ”to induce [computer makers] to either delay or cancel the launch” of products that used AMD chips.

  • Intel provided CPU chips to strategic customers at below cost ”in the context of bids against AMD”.

Intel can respond to the charges and seek a hearing.

The commission can fine Intel if, after considering the company’s formal response, it finds the charges are justified. Such a fine could be up to 10% of annual turnover, but experts say the chances of such a large penalty are remote.

Intel can appeal in the courts against a commission decision.

AMD said on Friday that the European Union charges against Intel would benefit consumers and computer makers.

”We are confident that this statement of objections will be a catalyst in opening the global microprocessor markets for the benefit of consumers and PC companies alike,” said Giuliano Meroni, AMD president for Europe, Middle East and Africa.

AMD gained market share against Intel in 2005 and most of 2006, but suffered a downturn later last year when Intel rolled out powerful new processors and cut prices on older models.

AMD’s market share at the end of 2006 was 25% of unit shipments for x86 processors. But by the end of March 2007, AMD had slipped to less than 19%, according to market research firm Mercury Research.

The charges come as the commission faces a challenge to its authority to enforce the law against abuse of market dominance.

In 2004 the commission found software company Microsoft had competed unfairly, ordering it to change its practices and fining it nearly â,¬500-million ($686-million).

Microsoft challenged the decision and a European Union court will rule on that case on September 17. – Reuters

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

Basic web lessons for South Africa: Government hacks point to...

Recent cyberattacks at the department of justice and the space agency highlight the extent of our naïveté

If the inflation-driving supply strain in the US lasts, it...

In South Africa, a strong trade surplus, buoyed by robust commodity prices, will cushion our economy against pressure arising from US policy

More top stories

Almost two million voters register for local elections

Young people make use of online portal and women account for more than half of the total registered

Free State regions cry foul after dissolution by interim provincial...

Regional ANC leaders have asked Duarte to intervene after the interim provincial committee resolved to dissolve their branches ahead of local government elections

ANC unlikely to replace Joburg mayor Matongo before 1 Nov

A party source said the ANC in Johannesburg would most likely call on one of the mayoral committee members to stand in as mayor until the local elections

Ramaphosa hits the right notes as he urges Cosatu to...

Cosatu meets to deliberate on its support for the governing party in the upcoming local government elections
Advertising

press releases

Loading latest Press Releases…
×