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Intel charged with abusing market position by EU

European Commission alleges chip giant Intel sought to exclude rival chip maker AMD from market.

The European Union charged chip maker Intel with abusing its lead in the processor market to exclude AMD from the chip market.

In a Statement of Objections, the European Commission said that Intel engaged in three practices "aimed at excluding AMD".

First, Intel provided substantial rebates to various original equipment manufacturers (OEMs) conditional on them obtaining all or the great majority of their CPU requirements from Intel.

Secondly, in a number of instances, Intel made payments in order to induce an OEM to either delay or cancel the launch of a product line incorporating an AMD-based CPU.

And thirdly, when bidding against AMD-based products for strategic customers in the server segment of the market, Intel has offered CPUs on average below cost.

"Each of them is provisionally considered to constitute an abuse of a dominant position in its own right," the Commission said in a statement. "However, 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."

Intel has 10 weeks to reply and will then have the right to an oral hearing. If the Commission finds that the abuse is confirmed, it may require Intel to cease the alleged practices and impose a fine.

In a statement, Intel said that it is confident that is conduct has been lawful, pro-competitive and beneficial to consumers and that the market is functioning as it should.

"While we would certainly have preferred to avoid the cost and inconvenience of establishing our competitive conduct in Europe has been lawful, the Commission's decision to issue a statement of objections means that at last Intel will have the opportunity to see and respond to the allegations of our primary competitor," Intel said.

It noted that the Statement of Objections contains only preliminary allegations and does not itself amount to a finding that there has been a violation of Community law. It also hinted that if it is found guilty, it will take the case to court.

"AMD has already filed one complaint in against Intel Europe which was rejected as groundless by the Commission in 2002," the statement says.

"Intel is confident that it will be able to show to the Commission's satisfaction that the microprocessor market is functioning normally and that its conduct has been pro-competitive and beneficial to consumers."

The Commission's decision to issue a Statement of Objections is the culmination of several years of enquiry that included a raid on Intel's UK headquarters in 2005.

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