After years of accumulating evidence, the European Union sets its antitrust crosshairs on Intel
After years of investigating Intel’s trade practices against AMD, the European Commission officially filed formal charges against the chip-making giant, as detailed in a statement of objections (SO) filed to the company today. “I can confirm the statement of objections has been sent,†said European Commission spokesman Tom Van Lierop, offering no further comment.
The European Commission raided Intel’s offices in 2005 on suspicions of anticompetitive activities. In 1999, Intel settled charges with the US Federal Trade Commission, and a later investigation by the FTC in 2000 was dropped. In 2004, the Fair Trade Commission in Japan raided Intel’s Japanese office, and in 2006 the Korean Fair Trade Commission raided Intel’s office in Seoul. Both raids were conducted as part of antitrust investigations in their respective countries.
In the United States, AMD sued Intel in June 2005 on charges of coercion and anti-competitive practices, running full-page ads in several US newspapers. “You may not be aware, but Intel’s illegal actions hurt consumers – everyday,†read the ad, pointing to a 48-page complaint (PDF) on AMD’s web site. Today the lawsuit is still working its way through the courts, with additional lawsuits pending in South America and other jurisdictions.
AMD enjoyed a surge in market share in 2005 and 2006 with its Opteron and Athlon 64 line of CPUs. However, with the launch of Intel’s heralded Core 2 line of CPUs in July 2006, AMD found itself losing much of the traction they had previously gained. At the end of 2006, AMD’s market share was 25% of all shipments for x86 processors, but by March 2007, that number slipped to less than 19%.
While AMD’s stock price has fallen, Intel’s has risen. Between slipping market share, the acquisition of Canadian GPU manufacturer ATI, and yet another round of substantial price cuts from Intel, AMD has found itself in a difficult place: while its most recent earnings report posted a 13% rise in quarterly revenue, those same figures also included losses of $600 million.
According to Intel’s Principles for Responsible Business (PDF), “Intel encourages competition, which benefits consumers by prohibiting unreasonable restraints on trade. Intel competes vigorously while at the same time adhering to both the letter and spirit of antitrust laws.â€