The European Commission late last week said it had sent a statement of objections to Intel Corp., accusing the world’s largest maker of chips in violation of the antitrust laws with the aim to exclude Advanced Micro Devices from the central processing units (CPUs) market.
In the statement of objection (SO), the Commission outlines its preliminary conclusion that Intel has engaged in three types of abuse of a dominant market position:
- First, Intel has 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.
- Thirdly, in the context of bids against AMD-based products for strategic customers in the server segment of the market, Intel has offered CPUs on average below cost.
These three types of conduct are aimed at excluding AMD, Intel’s main rival, from the market. Each of them is provisionally considered to constitute an abuse of a dominant position in its own right. 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, the Commission said in a statement.
“Consumers know today that their welfare has been sacrificed in the illegal interest of preserving monopoly profits. Intel has circled the globe with a pattern of conduct, including direct payments, in order to enforce full and partial boycotts of AMD. The EU action obviously suggests that Intel has, once again, been unable to justify its illegal conduct,” said Thomas M. McCoy, AMD executive vice president legal affairs and chief administrative officer.
Intel has 10 weeks to reply to the SO, and will then have the right to be heard in an Oral Hearing. If the preliminary views expressed in the SO are confirmed, the Commission may require Intel to cease the abuse and may impose a fine.