Out-Law News 1 min. read

European Commission takes over German Intel case


The European Commission has expanded its case against Intel by taking over a German antitrust case against the leading chip maker. An existing German case will now become part of the European Commission's ongoing investigation.

Free OUT-LAW Breakfast Seminars, UK-wide. 1. Legal risks of Web 2.0 for your business. 2. New developments in online selling and the lawThe commission is investigating claims by Advanced Micro Devices (AMD) that Intel abused its dominant market position to compete unfairly. The commission has raided a number of Intel offices in Europe as well as the offices of computer manufacturers.

The German antitrust regulator Bundeskartellamt had been pursuing a case involving an AMD complaint that Intel had pressured retail company Media Markt to refuse to sell computers running on AMD chips. The German regulator has now agreed to allow the commission to subsume that investigation into its own.

"The commission is concerned that Intel has been putting pressure on Media Markt not to stock computers that include AMD chips as opposed to Intel chips," EU spokesman Jonathan Todd told reporters.

The commission's investigation dates from 2001 and focuses on whether or not Intel used its dominant position to try to force PC manufacturers not to use AMD's chips.

Though Intel was once so dominant on computers using the Windows operating system that the phrase Wintel was coined to describe the machines, AMD has enjoyed something of a commercial resurgence.

Though AMD was barred from competing in the PC chip market until 1995, competition since then has begun to bear fruit. Chips from AMD can now be found in Dell computers and Intel's market share has been hit.

That competition from AMD forced Intel last week to cut 10% of its staff. It announced that 10,000 employees would be forced out of the company by the middle of 2007, a move that analysts put down to competition from AMD.

That loss of market share is likely to be used by Intel as an argument in its antitrust cases. It could argue that the fact that it is losing market share is proof that it has not abused its market dominance.

"I think this is an argument that Intel will put forward but I don't think it will make a difference," said Angelo Basu, a competition law specialist at Pinsent Masons, the law firm behind OUT-LAW. "It is one of those things where you are damned either way: if you have benefited it is bad and if you haven't benefited it's bad luck, but neither of these would strengthen a competition case."

Basu said that the European Commission's actions in taking over the German case show that it wants to ensure consistency across Europe. "They don't want people taking cases in different countries and getting a whole series of different results," he said. "They want to see consistency across Europe and they want to be the ones to make the decision about it."

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