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Could European Commission Force Intel To Change Business Model?
By Ken Nagy on March 10, 2009 | More Posts By Ken Nagy | Author's Website
These things move kind of slow.
In July of 2005 the European Commission raided the offices of Intel (NASDAQ:INTC) and other computer makers across Europe as part of a probe into possible anti-trust violations.
By July of 2007 the commission was ready to tag Intel with a formal complaint. The EU charged that Intel used illegal methods to coerce OEM computer manufacturers to ship systems with Intel rather than Advanced Micro Devices (NYSE:AMD) processors.
The company filed a petition in October of 2008 with the Court of First Instance, requesting a delay in the investigation while it was seeking access to additional documents in order to better defend itself. The court ruled that access to the additional documents wasn’t necessary in order for Intel to defend itself.
On February 23, 2009, The European Commission said the firm filed a response to antitrust charges, but it rejected Intel’s request to present a defense in an oral hearing. Intel had confirmed answering the charges in a filing to U.S. regulatory authorities this month.
The European Commission does not like Intel’s pricing practices. They feel Intel’s rebates to computer makers and retailers are a bid to drive rival AMD out of the market.
Intel may find itself on the wrong end of a pretty hefty fine, but that’s not what worries the chip maker. After all, the chip giant has a huge cash balance. The real fear is the commission could alter Intel’s model.
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