European Commission publishes Intel anti-trust evidence

The European Commission has published the evidence behind its decision to fine chip maker Intel €1.06bn ($1.8 bn) for breaching anti-trust laws.

The Commission ruled that Intel abused its dominant position in the x86 processor market by implementing a series of conditional rebates to computer manufacturers and to a European retailer and by taking other measures aimed at preventing or delaying the launch of computers based on competing products.

Intel was concerned about the rise of rival manufacturer AMD, according to the Commission.

Intel rebates to Dell from December 2002 to December 2005 were conditioned on Dell purchasing exclusively Intel processors – the Commission said internal Dell documents from the time show fears that switching to AMD chips would lead to a loss of business.

And Intel rebates to HP from November 2002 to May 2005 were conditioned in particular on HP purchasing no less than 95 percent of its needs for business desktops from Intel, according to emails between HP and Intel executives.

In the same period Intel rebates to NEC were conditioned on NEC purchasing no less than 80 percent of its needs for its desktop and notebook segments from Intel, while rebates to Lenovo during 2007 were conditioned on Lenovo purchasing its CPU needs for its notebook segment exclusively from Intel, according to an internal Lenovo email.

Between November 2002 and May 2005, Intel payments to HP were conditioned on HP selling AMD-based business desktops only to small and medium enterprises, only via direct distribution channels and on HP postponing the launch of its first AMD-based business desktop in Europe by six months.

The Commission cited an internal HP email which said: "You can NOT use the commercial AMD line in the channel in any country, it must be done direct. If you do and we get caught (and we will) the Intel moneys (each month) is gone (they would terminate the deal). The risk is too high."

And Intel payments to Acer were conditioned on Acer postponing the launch of an AMD-based notebook from September 2003 to January 2004. Furthermore Intel payments to Lenovo were linked to or conditioned on Lenovo postponing the launch of AMD-based notebooks from June 2006 to the end of 2006.

The Commission also cited evidence from Dell, HP and MSH where the hardware companies point to further examples of verbal threats of the withdrawal of business that were not written down.