EU raids Intel over 'chip war' charges

Published on Tuesday 12 February 2008 20:43

EUROPEAN Union officials mounted a surprise raid on the offices of Intel yesterday as they stepped up their investigations into allegations that the world's largest chip maker had broken competition rules.

The EU investigators also broke new ground by raiding Germany's huge Media Markt-Saturn, British electrical goods retailer DSG International Plc – which owns Dixons and Currys – and France's PPR, owner of retailer Fnac.

Intel spokesman Chuck Molloy yesterday confirmed that the company's Munich office in Germany had been raided and said the firm would co-operate closely with the investigation.

The surprise inspections were the EU's first major move in response to complaints from smaller rival Advanced Micro Devices (AMD) alleging Intel pressed major stores to avoid computers with its chips.

Intel is already facing formal EU charges of monopoly abuse for below-cost customer rebates and pricing that the EU claims undercuts AMD and discourages manufacturers from building computers with their chips.

The new raids focus on the final link of the supply chain – the stores that select computers to sell directly to customers. AMD claims Intel's sales tactics unfairly shut out any rivals.

Intel faces EU fines as high as 10 per cent of its yearly global revenue if it is found to have broken the rules.

Based in California, the company sells more than three-quarters of all microprocessors that act as the "brains" of computers using Microsoft's Windows operating system.

The EU formally charged Intel last July, alleging that it gave "substantial rebates" to computer makers for buying most of their x86 central processing units, CPUs, from Intel.