Intel in EU competition probe

Intel is accused of squeezing rivals out of the market

The European Commission is investigating alleged market abuses by the world's biggest computer chip maker Intel.

The US chip giant is accused of using anti-competitive practises to retain its stranglehold on the market for Windows-compatible microprocessors.

The probe is focusing on Intel's exclusive distribution agreements with PC manufacturers and retailers.

Intel bosses are also being questioned over rebates granted to loyal customers.

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The investigation, which has been going on for several months, came to light on Friday.

It follows separate complaints from Taiwanese chipmaker Via Technologies and California's Advanced Micro Devices, one of Intel's biggest rivals, at the end of last year.

A competition commission spokesman said loyalty rebates granted by companies with a dominant position were illegal, as they pushed smaller rivals out of business.

She added the exclusive distribution agreements Intel had with PC manufacturers and retailers could effectively lead to the closure of the microprocessor market to competitors.

The commission has requested information from Intel and other PC manufacturers and retailers.

But it has not so far made any findings that Intel has infringed EU competition law.

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The EU has informed the US authorities about its move against Intel, but at the moment it is not coordinating its activities with the US Federal Trade Commission.

Last September, the US commission dropped its own long-running investigation into Intel and the latest EU move is not connected to that probe.

The EU is also carrying out an investigation into Microsoft's dominance of the market for personal computer operating software.

EU competition commissioner Mario Monti said last week that he would shortly be taking a decision on whether to raise new objections to Microsoft's position.

The EU's concern over Microsoft and Intel's near monopoly of the computer market comes at a time when the US Bush administration's support for anti-trust cases appears to be waning.