Intel: Antitrust agencies are testing the limits

A company executive says he is 'mystified' by what the EC wants Intel to change

Antitrust regulators around the world, led chiefly by the European Commission, are testing the limits of the law in their pursuit of Intel and its practice of offering rebates to computer manufacturers and IT retailers, Intel Senior Vice President Bruce Sewell said Wednesday.

He spoke to journalists shortly after the European Commission found Intel guilty of abusing its dominant position in the microprocessor chip market in Europe, at the expense of its only significant rival, Advanced Micro Devices.

The Commission fined Intel a record EUR1.06 billion (US$1.44 billion) and ordered it to stop handing out rebates to PC manufacturers and retailers on condition of near or total exclusivity. It also ordered the firm to stop paying PC makers to delay the launch of models equipped with AMD chips.

Antitrust authorities in South Korea and Japan have also found fault with Intel's marketing methods, including rebates, and the U.S. Federal Trade Commission (FTC) and New York Attorney General's office are both investigating Intel for abuse of its monopoly position.

"Today's ruling isn't against rebates, just the rebates that abuse a market position," competition commissioner Neelie Kroes said during a press conference convened to announce the antitrust decision.

It is, she said, a very clear cut case of abuse of a dominant position. "I can't imagine it's unclear what has to stop."

But Intel's Sewell said it is very unclear."I am mystified as to what it is we are being asked to change," he said, adding that the ruling fails to distinguish between permissible and illegal rebates.

Intel said it will appeal the ruling, a process that could take several years.

And in what appeared to be a rebuke of antitrust authorities the world over, Sewell said: "There's been an evolution in antitrust law and how rebates are to be conducted by dominant companies. We see a line of thought coming mainly from the European Commission - but also in Korea and Japan - that rebates can be anti-competitive."

"Antitrust agencies are testing the boundaries of the law," he said.

Last year Korea's Fair Trade Commission (KFTC) fined Intel $25 million and ordered it to stop paying PC manufacturers rebates in return for excluding AMD chips. Intel is appealing the ruling.

In 2005, the Japan Fair Trade Commission (JFTC) ruled that Intel had violated the country's anti-monopoly laws by illegally forcing full or partial exclusivity with five Japanese PC makers in return for rebates.

Sewell said the company settled with the Japanese authorities and escaped being fined after agreeing not to apply certain types of rebates.

"In Japan, we were told to stop certain types of rebates which we weren't even using, never had done. Three years on nothing in that market has changed and no one is contesting whether we are in compliance," he said.

As for the U.S., Sewell said he read the comments by Christine Varney, the new chief of the antitrust division of the Justice Department "with great interest" and vowed to work closely "with all agencies."

Earlier this week, Varney effectively called an end to eight years of inertia in the department she has taken over.

The Obama administration will vigorously enforce antimonopoly laws and work more like the Commission in tackling monopoly abuse, she said. Not one antitrust case was pursued under the two Bush administrations.

Kroes welcomed Varney's comments.

"They give me a huge positive feeling. The more competition authorities join with us the better," she said, adding she was confident there would be a close working relationship in antitrust across the Atlantic.

Join the Good Gear Guide newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags antitrustintel antitrustintel

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Paul Meller

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?