October 3, 2006 11:22 pm

Intel likely to face EU antitrust charges

European Union antitrust regulators are close to issuing formal antitrust charges against Intel, alleging that the world’s biggest chip manufacturer is abusing its dominant market position.

According to people familiar with the case, the charges would allege that Intel has undermined competition by offering rebates to computer manufacturers that shut out its only rival, Advanced Micro Devices.

The European Commission is also understood to be preparing charges alleging that Intel has engaged in predatory pricing aimed at keeping AMD’s competing chips out of the market.

The Commission, the EU’s top antitrust regulator, has been investigating Intel’s conduct for six years. A draft so-called “statement of objections” containing the charges has circulated internally for several weeks, but has not yet been given the green light by Neelie Kroes, the EU competition commissioner and the official who will ultimately decide the fate of the investigation.

A spokesman for Intel said: “Intel is continuing to cooperate with regulators from the European Commission. We believe our business practices are both fair and lawful. This is a confidential process so we will have no further comment.”

In big cases such as the one against Intel or the Commission’s long-running probe against Microsoft, formal decisions are often delayed and the content of the formal charge sheet can be rewritten at a late stage.

However, it is understood that the officials investigating Intel have gathered a large amount of incriminating material against Intel over the past years, not least thanks to a series of raids against the group and several computer manufacturers that were conducted in July last year.

The Commission’s investigation into alleged abuses by Intel began in 2000, after AMD filed a complaint to the Brussels regulator. The probe was almost abandoned in 2002, but gathered steam again two years ago.

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