EU publishes e-mails to back case against Intel (Update)

Sep 21, 2009
Intel Logo

(AP) -- The European Union on Monday published e-mail excerpts from computer makers and Intel Corp. to show that Intel pressured chip buyers into choosing Intel over rival Advanced Micro Devices Inc.

Intel was hit by a record EU antitrust fine of euro1.06 billion ($1.45 billion) last May for what the EU said was using strong-arm sales tactics such as threatening to withdraw price rebates to squeeze out AMD. The company rejects the charges and is appealing to the EU courts.

EU spokesman Jonathan Todd said the publication of the EU's decision "gives full details of the hard facts on which the Commission's decision was based."

"You can see for yourselves the way in which Intel broke the law and deprived millions of European consumers of choice of the type of computer they wanted to have in their computers," he told reporters.

Intel spokesman Robert Manetta said the company believed that the EU's views of its business practices "are wrong, both factually and legally." He said regulators overlooked or misinterpreted testimony from senior executives that would have cleared Intel of the charges.

"The Commission relied heavily on speculation found in emails from lower level employees that did not participate in the negotiation of the relevant agreements," he said. "They ignored or minimized hard evidence of what actually happened."

The Santa Clara, California, company has previously defended its sales practices - which include rebates to big Intel customers - as legitimate and good for customers because it can lead to lower prices.

The European Commission sees that differently, alleging that the company's actions ultimately harmed consumers by limiting competition.

They said Dell Inc. executives were warning each other by e-mail in 2003 that buying more AMD chips could trigger retaliation from Intel that would be "severe and prolonged with impact to all lines of business."

Joining the "AMD exodus" would see Dell's rebate from Intel stripped to zero "for at least one quarter while Intel investigates the details," the Dell executive said in an e-mail.

Dell also complained to Intel in a 2004 e-mail that sticking to Intel chips "results in Dell being uncompetitive ... we have slower, hotter products that cost more across the board in the enterprise with no hope of closing the performance gap for 1-2 years."

Hewlett Packard Co.'s rebates from 2002 to 2005 were linked to it buying at least 95 percent of its business desktop chips from Intel, the EU said.

HP were keen to keep this secret. An executive wrote a 2003 e-mail asking staff "please do not ...communicate to the regions, your team members or AMD that we are constrained to 5 percent AMD by pursuing the Intel agreement."

Another HP e-mail from 2004 said it could only sell AMD-based business desktops to small and medium companies directly - and not via distributors - warning that any move to do differently carried a high risk.

"You can NOT use the commercial AMD line in any country ... If you do and we get caught (and we will) the Intel moneys (each month) is gone (they would terminate the deal). The risk is too high," the e-mail said.

An NEC. Corp. e-mail said the company had agreed to buy 80 percent of its desktop and notebook chips from Intel in return for a support and an "aggressive" price. The EU also quoted an e-mail from Intel saying that Acer Inc. had decided to drop an AMD notebook line in 2003 after calls with Intel executives.

Europe's biggest computer retailer Media Saturn Holding received payments from Intel to shun AMD-based computers from 2002 to 2007, the EU said.

In a statement to regulators, MSH said it understood that selling more computers with AMD chips would see it receive less from - even if it sold the same number of Intel-based computers.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Netflix branches into films with 'Crouching Tiger' sequel

add to favorites email to friend print save as pdf

Related Stories

Intel: $1.4B EU monopoly fine based on mistakes

Sep 15, 2009

(AP) -- Intel Corp. is claiming in court documents that European Union regulators made serious mistakes in levying a record euro1.06 billion ($1.45 billion) fine for monopoly abuse last May.

EU defends action against Intel after report leaked

Aug 08, 2009

The EU Commission on Saturday defended its record-busting anti-trust action against Intel, following a report that it missed evidence which could have boosted the US computer chip giant's case.

Intel hit with $1.45B fine in Europe

May 13, 2009

(AP) -- Intel Corp. was fined a record $1.45 billion by the European Union on Wednesday for using strong-arm sales tactics in the computer chip market - a penalty that could turn up the pressure on U.S. regulators ...

Chief of Intel's biggest division heads to EMC

Sep 14, 2009

(AP) -- Intel Corp., the world's biggest computer chip maker, said Monday that Pat Gelsinger, who ran Intel's main division, and Bruce Sewell, Intel's top lawyer, are leaving the company.

Recommended for you

What's PayPal's first solo move?

15 hours ago

PayPal's impending split from long-time partner eBay Inc. will ratchet up its appeal to online retail competitors such as Amazon.com and give it the freedom to aggressively take on new mobile pay challeng ...

AOL to feed more video, news to Microsoft's MSN

20 hours ago

AOL will provide Microsoft's MSN with more video and additional news stories from popular sites such as The Huffington Post and TechCrunch in an expansion of a deal aimed at selling more digital advertising.

Microsoft to tap $2-trillion Indian cloud market

Sep 30, 2014

Microsoft announced plans Tuesday to offer its commercial cloud services from Indian data centres as it seeks to tap what it calls a $2-trillion market in the country where Internet use is growing rapidly.

User comments : 2

Adjust slider to filter visible comments by rank

Display comments: newest first

Alienizer
1 / 5 (1) Sep 21, 2009
Another way for the government to make money.
El_Nose
not rated yet Sep 22, 2009
Okay the EU is right -- bad business practices -- but man this is a real fleecing... AMD isn't getting the money the EU is.

which means basically taking a billion from a US based company and helping to pay off its version of the TARP they used to prop up their banks. only partially j/k