Wednesday, February 13, 2008

BRUSSELS (AP) — European Union antitrust regulators raided Intel Corp. offices and computer retailers yesterday seeking evidence they may have broken rules to ensure competition in the market for computer chips, the European Commission and Intel said.

Intel spokesman Chuck Molloy confirmed that the company’s Munich office had been raided and said the company would cooperate closely with the investigation.

Europe’s largest consumer electronics retailer, Germany-based Media Markt, said it was also raided, as was Britain’s DSG group, which owns Dixons, Currys, PC City and PC World.

The surprise inspections were the EU’s first major move in response to complaints from smaller rival Advanced Micro Devices, claiming that Intel pressed major stores to avoid computers using AMD chips.

Intel, the world’s biggest chip maker, is already facing formal EU charges of monopoly abuse for below-cost customer rebates and pricing that the EU says undercut AMD and discourage manufacturers from building computers with their chips.

The raids focused on the final link in the supply chain — the stores that select computers to sell directly to consumers. AMD claims a wide range of bullying tactics by Intel shut out all of its rivals.

The EU said there was no strict deadline for deciding whether to file charges or drop the case. EU fines can go as high as 10 percent of a company’s yearly global revenue. Last year, Intel’s revenue amounted to $6.98 billion.

Intel, based in Santa Clara, Calif., sells more than three-quarters of all microprocessors, the brains of computers, that use Microsoft Corp.’s Windows operating system.

The EU formally charged Intel in July — six years after it first started looking at the company — charging that it gave “substantial rebates” to computer makers for buying most of their x86 central processing units, or CPUs, from Intel.

The EU executive also accused Intel of making payments to manufacturers to get them to delay or cancel product lines using AMD chips and that it sold its own chips below average cost to strategic server customers.

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