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Intel antitrust ruling expected on Wednesday

Competition case could finally come to a head

The European Commission looks set to deliver its ruling in Intel's antitrust case this week.

Intel has been under investigation since 2000 for handing out rebates to computer manufacturers in return for them buying the bulk of their x86 computer processing chips (CPUs) from Intel.

The company also stands accused of paying computer makers for scrapping or delaying the launch of machines fitted with chips made by its nearest rival, AMD, and of selling its chips for server computers at below cost to large customers such as governments and universities.

A source close to the competition department said last week that the 27 commissioners will conclude the case on Wednesday.

Intel claims it is simply doing what any company would, only better. However, the EC took the hard lines against IBM and Microsoft, which were previously accused of similar tactics.

While IBM settled with the regulator, agreeing to change the way it competed in the market for mainframe computers, Microsoft stuck to its guns and was consequently fined €497m for abusing its dominant position in the software market, plus an additional €1.2bn for failing to respect the antitrust ruling.

Intel is expected to face a fine of a similar order. Last year the Commission added fresh charges, accusing the chip giant of paying generous rebates to Media Markt, Europe's biggest chain of IT stores, in return for it de-listing all computers running AMD chips.

Intel dominates the personal-computer chip market by a mile. At the end of last year its market share stood at 81.9 percent, while AMD held 17.7 percent, according to IDC.

Technically, the Commission can fine a company up to 10 percent of its global sales the year before a monopoly abuse ruling. Last year Intel generated revenues of $37.6bn, which means the ceiling for a fine would be $3.76bn. But the regulator has never applied a maximum fine to date.

The company has not been informed that a ruling is due this week. "We haven't heard anything officially, just rumours mostly coming from journalists," said Intel spokesman Robert Manetta.

And he repeated the company's standard line that its conduct is lawful, pro-competitive and beneficial to consumers.


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