Page last updated at 05:41 GMT, Wednesday, 23 September 2009 06:41 UK

Intel on offensive in EU case

By Maggie Shiels
Technology reporter, BBC News, San Francisco

toothpick
Intel's chips power most of the world's personal computers

Intel has said it is looking forward to its day in court when its appeal against a record fine imposed by EU anti-trust regulators is heard.

This week the European Commission published data to support its case against the American chip maker.

It detailed evidence from Intel clients that led to a $1.45bn fine for illegally shutting out rival AMD.

"I can't wait to get our side of the story out in the public," Intel President Paul Otellini told the BBC.

"I continue to believe and assert they (the European Commission) have got it wrong. We have appealed and we will win on appeal," said Mr Otellini following his keynote address at the company's annual developer forum in San Francisco.

In May the European Commission, the European Union's executive, ruled that Intel had paid computer makers to postpone or scrap plans to launch products using AMD's chips, given illegal rebates and paid a retailer to stock only computers with Intel chips.

It said these "illegal" competitive practices harmed consumers.

AMD first filed a formal complaint with the European Commission against Intel in 2000, in what it alleged were anti-trust practices.

It was not until July 2007, following high-profile raids on Intel offices, that the company was formally charged with breaches of competition rules.

'Naked restrictions'

This week the Commission published a 518-page document that detailed its case that resulted in $1bn fine.

Intel
It may take two years before the appeal is settled

Among the emails and company records was one communication from US computer firm Dell in 2003.

According to the EU's findings, it noted that Intel's retaliation "could be severe and prolonged with impact to all lines of business" if Dell were to start buying chips from Intel competitor AMD.

An email from an executive of Chinese high-tech giant Lenovo was also cited in the EU decision which spoke of Intel's "naked restrictions" on business partners.

"Late last week Lenovo cut a lucrative deal with Intel. As a result of this, we will not be introducing AMD-based products in 2007 for our Notebook products," the December 2006 email said.

There was similar evidence concerning an Intel deal with Hewlett Packard.

Intel has roughly 80% of the market versus AMD's 20% share.

'Unfair'

Europe's top competition watchdog had charged Intel with using illegal loyalty rebates to squeeze rivals out of the market for central processing units which are described as the brains inside personal computers.

Intel has defended such rebates, arguing that computer makers approach the company looking for price reductions.

Intel boss Paul Otellini
Intel boss Paul Otellini criticised the release of documents

"With the publication of this decision, you can see for yourselves precisely the facts on which the decision was based and how Intel broke the law," EU Commission spokesman Jonathon Todd told reporters in Brussels.

Intel has challenged the ruling and following the publication of these documents went on the offensive.

"They (EU prosecutors) have consistently ignored information that would have painted an entirely different story about those memos.

"We are precluded from releasing our own documents, which I thought was a bit unfair," said Mr Otellini. "In the Intel case I think they have certainly overstepped."

It is understood a ruling on Intel's appeal could take as long as two years.



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