Antitrust panel raids Intel sites

Firm's European offices object of surprise visits


BRUSSELS, Belgium - The European Commission turned up the heat in its antitrust investigation of Intel yesterday, conducting unannounced visits to the company's offices around Europe, a commission spokesman said.

Besides the early visits to Intel offices, commission officials also conducted dawn raids on computer makers and retailers, seeking evidence that Intel, the world's No. 1 chip maker, has been abusing a rebate program intended to keep PC makers from buying chips from Intel's competitors.

Jonathan Todd, spokesman for the European Commission, refused to say which computer makers and retailers were involved.

"Officials are conducting inspections of several premises of Intel, as well as the premises of PC manufacturers and retailers in Europe," Todd said, without giving details on the focus of the searches.

Intel, based in Santa Clara, Calif., declined to comment.

Dell Inc. offices in Britain were among those visited by the investigators, company spokesman Jess Blackburn, in Austin, Texas, told the Associated Press.

The commission, Europe's pre-eminent antitrust authority, first looked into Intel's business practices at the end of 2000, after receiving complaints from rival chip makers that Intel was abusing its dominant position to keep them at bay.

The commission investigated Intel's licensing agreements with PC makers and retailers, and the rebates it granted them in return for their loyalty.

But two years later, the commission set its investigation aside for lack of evidence. The case lay dormant until June 2004, when the commission reopened the file after antitrust authorities in Japan started to raise questions about the company.

In March, the Fair Trade Commission of Japan found Intel guilty of breaking its rules by giving rebates to five Japanese PC makers in exchange for buying its chips. The five companies were Toshiba, Sony, NEC, Fujitsu and Hitachi.

Based on that ruling, Advanced Micro Devices Inc., one of Intel's top rivals, sued Intel in Tokyo last month for $55 million in damages. Advanced Micro, based in Sunnyvale, Calif., is also suing Intel in the United States, accusing it of similar anti-competitive behavior. Both suits are in progress.

Yesterday, Advanced Micro applauded the commission's renewed action. "Today's dawn raids should come as good news to consumers across Europe," said Thomas M. McCoy, Advanced Micro's executive vice president for legal affairs and chief administrative officer. "Every computer user has a strong interest in ensuring that the full truth about Intel's anti-competitive abuses is revealed and corrected."

Before setting the Intel case aside, the commission also examined a technical issue raised in a complaint it received at the end of 2000 from VIA Technologies. The company claimed that Intel's bus, which connects the microprocessor chip with the rest of the PC, creates compatibility problems for rival chip makers.

Intel said at the time that its bus architecture is its intellectual property, and it did not have to make it compatible. VIA eventually licensed Intel's bus architecture.

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