Intel And EC Play Hardball

Earlier this week, the EC said: 'The Commission's preliminary view is that Intel has infringed EC Treaty rules on abuse of a dominant position (Article 82) with the aim of excluding its main rival, AMD, from the x86 Central Processing Units (CPU) market.'

There was a general expectation that the EC's final judgment on the case would be announced last October, but Intel had refused to reply to the EC's Statement of Objections to its conduct. Instead of replying, Intel applied to a European court to have the investigation delayed and asked to be shown further documents.

The court's judge decided that Intel had no need to see the further documents to make its reply, and ordered Intel to make its reply. On Feb 5th Intel did make its reply and asked for an oral hearing.

Earlier this week, the EC rejected the request for an oral hearing. This week's EC statement ran: 'In its submission of 5 February 2009, Intel requested an oral hearing. That request has been considered and rejected by the Commission's Competition Hearing Officer.'

The next move is for the EC: 'The Commission will nevertheless assess whether the information submitted on 5 February 2009 is necessary to properly conduct the administrative procedure in this antitrust case,' said the EC this week.

The allegations mostly relate to Intel's alleged practice of giving rebates to customers which commit to using a limited number of AMD chips.

Intel has already been found guilty of such practices by the competition authorities in Japan and Korea and is being investigated on similar charges by the attorney-general of New York.

Intel is playing hardball with the EC. The company's lawyer accused the EC's competition authorities of selective use of evidence, while Intel boss Paul Otellini has dismissed the threat of the maximum possible fine of ten per cent of its revenues as just a matter of  'writing a cheque'.

This could, of course, be a $3 billion cheque, but Intel may still feel worse about being ordered by the EC to stop the alleged unfair trading practices.