The EC versus Intel: The SO is issued

Geoffrey Manne —  26 July 2007

To no one’s great surprise (other than that it took so long), the European Commission issued a Statement of Objections against Intel today.  More information as it becomes available.

For those looking for a little insight into the case, you might be intrested in The FTC’s 1998 Complaint against Intel and the resulting Consent Decree (the entire case file is here). 

Or not.  That case involved something about patents and access to technical information by OEMs.  Today the issue is low prices!  The crux of the European Commission case most certainly involves the sort of alleged anticompetitive issues (you know, rebates, discounts and exclusive deals, oh my!) detailed in this case, a private action brought by competitor AMD against Intel in 2005.  In fact, given that Intel’s worldwide woes have all been brought about at AMD’s behest, I would guess the European S.O. bears a lot of similarities to AMD’s private antitrust actions.

Should be interesting.

UPDATE:  And so it does (look an awful lot like AMD’s private actions). The EC comments (a bit) on the SO here:

In the SO, the Commission outlines its preliminary conclusion that Intel has engaged in three types of abuse of a dominant market position. First, Intel has provided substantial rebates to various Original Equipment Manufacturers (OEMs) conditional on them obtaining all or the great majority of their CPU requirements from Intel. Secondly, in a number of instances, Intel made payments in order to induce an OEM to either delay or cancel the launch of a product line incorporating an AMD-based CPU. Thirdly, in the context of bids against AMD-based products for strategic customers in the server segment of the market, Intel has offered CPUs on average below cost.

It should be a hard sell to find abuse of dominance in the sorts of price-reducing activities (rebates, discounts), but this is the EC–anything is possible when it comes to successful foreign compnaies, particularly when the actions against them are instigated by other foreign competitors.  It is not at all surprising that Intel is “eagerly anticipating Spetember 17th.” (Bonus points for anyone who knows why, without looking).

Geoffrey Manne

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President & Founder, International Center for Law & Economics