EU charges Intel with monopoly abuse

BRUSSELS -- EU regulators said Friday they have charged Intel with monopoly abuse for blocking rival computer chipmaker Advanced Micro Devices' access to customers.

Intel immediately said its conduct had been lawful and said it welcomed the chance to finally respond to allegations made by its main competitor.

The European Commission claimed that Intel gave "substantial rebates" to computer makers for buying most of their x86 computer processing units, or CPUs, from Intel; that it made payments to manufacturers to get them to delay or cancel product lines using AMD chips; and that it sold its own chips below cost on average to strategic server customers on bids against AMD products to try to muscle into that business.

It said each of these alone broke EU law by shutting out AMD from the market. Together they amounted to a strategy that damaged the rules of fair play in an effort to keep AMD from eroding Intel's market leadership, it said.

"The Commission also considers at this stage of its analysis that the three types of conduct reinforce each other and are part of a single overall anti-competitive strategy," it said.

Intel has a chance to defend itself before the EU's executive arm takes a final decision that could order the company to stop abusive behavior or charge it fines that can run into the hundreds of millions of dollars.

Intel, based in Santa Clara, Calif., is the world's biggest chipmaker.

The company's general counsel, Bruce Sewell, said Intel was confident that the microprocessor market was functioning normally and that Intel's behavior had been lawful, pro-competitive and beneficial to customers.

"The case is based on complaints from a direct competitor rather than customers or consumers," he said. "The evidence that this industry is fiercely competitive and working is compelling. When competitors perform and execute the market rewards them. When they falter and underperform the market responds accordingly."

Intel has 10 weeks to reply to the preliminary charges and can seek an oral hearing to put its side.