Business

EC raids Intel, PC makers in competition inquiry

Officials from the European Commission, the executive arm and antitrust watchdog of the European Union, raided the European offices of Intel Corp. and a number of PC manufacturers on Tuesday.

Representatives of the Commission and of national competition authorities carried out on-site inspections of several Intel offices and of the offices of an undisclosed number of PC manufacturers, Commission spokeswoman Linda Caine said.

“These inspections are carried out in the framework of an ongoing competition investigation,” Caine said.

She was unable to name the PC manufacturers involved, or the countries where the offices are located.

A spokeswoman for Intel confirmed said that raids had taken place at the company’s sites in Swindon, England, and Munich, Germany. “Intel believes that our business practices are both fair and lawful,” said Marlo Thompson, spokeswoman for Intel Europe, Middle East and Africa, adding that “it is Intel’s practice to cooperate fully with the authorities in these investigations and this is what we are doing in this case.”

A representative of Advanced Micro Devices (AMD) Inc. welcomed the news of the Commission’s raid. “It’s a sign the investigation into Intel’s continuing infringements of E.U. competition rules is being stepped up,” said Jens Drews, AMD’s director of government relations. He added that AMD had provided the European Commission with “strong evidence of illegal activities” by Intel which, he said, had “clearly been sufficient for the E.U. to respond with its strongest weapon — the dawn raid.”

Drews continued: “Intel is preventing customers from buying AMD products with threats and payments,” referring to the discovery by Japanese antitrust authorities of evidence that Intel was violating Japanese antitrust laws.

It’s now a little more than a year since the Commission wrote to European PC vendors asking about Intel’s business practices, kicking off a new round of investigations into a complaint filed in 2000 by Intel’s microprocessor rival Advanced Micro Devices Inc. (AMD). In 2002, the Commission declared that complaint “not founded,” but never officially closed the investigation.

Intel has also been investigated by the Fair Trade Commission of Japan (JFTC). In March, the JFTC asked Intel to end its practice of promising funds to PC makers if they agreed not to use its competitors’ processors, and in April Intel KK, the company’s Japanese subsidiary, accepted JFTC’s findings.

At the end of last month, AMD also filed a complaint against Intel in a U.S. district court, alleging various anticompetitive practices. That complaint cites examples of payments made or pressure applied by Intel to PC manufacturers, distributors and resellers in the U.S., Europe and Asia.

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