EU Investigators Urge Intel Charge Antitrust Chief To Weigh Decision On AMD Complaint

WSJ ^ | January 17, 2007 | MARY JACOBY

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European Union investigators have recommended that EU Antitrust Commissioner Neelie Kroes formally charge Intel Corp. with illegally thwarting competition...

Ms. Kroes must either act against the Santa Clara, Calif., chip maker or drop the six-year-old case. She has asked for more information before making a decision, the people said. She can do so at any time.

Last October, EU investigators convened an internal panel of legal and economic experts to explore possible weaknesses in their case.

In a reflection of the case's high economic and political stakes, the EU investigators then spent nearly three months on internal debate before reaching a staff-level consensus last month.

Ms. Kroes is proceeding cautiously, the people said, anticipating that any charges against Intel could rival the EU's nearly decade-old antitrust case against Microsoft Corp. in terms of complexity and controversy...

Intel rival Advanced Micro Devices Inc. filed an EU complaint in October 2000, alleging Intel illegally abuses its position as the world's dominant chip maker by punishing computer makers when their chip purchases from AMD reach a certain level, typically around 20%.

AMD holds just less than 20% of the global $38 billion annual market in chips that use a design called x86 that are the most popular electronic brains for computers, the company said. Intel holds the rest.

AMD has been gaining global market share recently, partly as a result of the popularity of its Athlon 64 chip for desktop computers and Opteron chip for business server systems. The market gains have given EU regulators some pause. But AMD, of Sunnyvale, Calif., contends its share of the market would be closer to parity if Intel played fair.

At the heart of the EU case are AMD's allegations that Intel withholds rebates from computer makers when they buy too many AMD chips...

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The EU's actions are motivated more by its desire to beat up American companies than its desire to encourage competition. You can be relatively certain that if Intel had been a European company, there would be no investigation.