Intel: More Antitrust Charges

September 12, 2007 by Douglas A. McIntyre

The European Union has been looking into whether Intel (INTC) employed unfair practices to gain market share and shut out smaller rival AMD (AMD). According to the FT the European Commission alleged that Intel offered chips below cost, gave substantial rebates to PC makers to encourage them to buy its chips. Intel could face a potential fine of up to 10% of its annual revenue.

Now the South Korean Fair Trade Commission has come up with a similar set of charges against Intel. It appears that, in the eyes of global regulators, Intel has become the new Microsoft (MSFT), an abuser of its dominant position, in Intel’s case in the x86 chip market.

Not unlike the Microsoft cases where the software company’s competitors gained though the legal system what they could not get in the open market, Intel now faces losing ground to AMD if authorities in places like the EU and South Korea prevail. Cases will almost certainly be brought in other countries.

Intel and Microsoft made the PC market, and now they are paying for it.

Douglas A. McIntyre