The Fair Trade Commission (JFTC) began investigating Intel last
year, launching a series of raids on company offices in April.
On Tuesday, after 11 months of investigation, the watchdog
accused the company of behaving in an anti-competitive manner by
offering rebates and discounts to five Japanese PC makers on
condition that they stop or restrict the number of chips they
bought from Intel's rivals.
According to one of those rivals, California based Advanced
Micro Devices, the combined market share of AMD and competitor
Transmeta fell from 24% in 2002 to 11% in 2003, as a result of
Intel's actions.
"The JFTC found that Intel illegally manipulated the market to
exclude competition, hurting PC users around the world," said
Thomas McCoy, AMD executive vice president, legal affairs and chief
administrative officer. "Using market power illegally to limit
innovation and, more importantly, consumers' freedom to choose,
cannot be tolerated. We encourage governments around the globe to
ensure that their markets are not being harmed as well."
Responding to the Recommendation, Intel affirmed its belief that
the company's business practices were both fair and lawful. But the
company also expressed concern at the reasoning behind the
Recommendation.
"One of the core principles of competition policy is the notion
that such policies should be based on sound economics," said Bruce
Sewell, vice president and general counsel for Intel. "There is a
broad consensus that competition regulators should only intervene
where there is evidence of harm to consumers. It is apparent the
JFTC's Recommendation did not sufficiently weigh these important
principles."
If Intel does not accept the JFTC's findings, the watchdog could
bring legal proceedings.
A separate European Commission investigation into allegations
that Intel negotiated anti-competitive loyalty rebates and
exclusive distribution agreements with PC manufacturers and
retailers is ongoing.
