Intel raided for a second time in Commission antitrust probe

Intel is accused by the European Commission of abusing its dominant position in the microchip market in order to exclude rival Advanced Micro Devices (AMD). It has been under investigation since 2001 and was formally charged in July last year.

The company's offices in the UK, Germany, Italy and Spain were raided in 2005 as part of the investigation. Last month the state of New York also announced an antitrust investigation into the company's behaviour.

"The European Commission can confirm that on 12th February 2008, Commission officials carried out unannounced inspections at the premises of a manufacturer of Central Processing Units (CPUs) and a number of personal computer (PC) retailers," said a Commission statement. Intel and German retailer Media Market both admitted that they were amongst the companies that were raided.

"The Commission has reason to believe that the companies concerned may have violated EC Treaty rules on restrictive business practices (Article 81) and/or abuse of a dominant market position (Article 82)," said the Commission statement. "The Commission officials were accompanied by their counterparts from the relevant national competition authorities.

The Commission has accused Intel of offering discounts to computer makers who only use its chips, of paying manufacturers to delay or cancel products containing AMD chips and of selling chips below cost in servers. It said the company had "an overall anti-competitive strategy".

Intel will face a hearing on those charges in the middle of March and the Commission itself will rule on whether the charges are valid or not, though that decision can be appealed through the courts.

Intel said last year that it rejected the accusations. "The case is based on complaints from a direct competitor rather than customers or consumers," Intel's general counsel Bruce Sewell told news agency Reuters. "The evidence that this industry is fiercely competitive and working is compelling. When competitors perform and execute the market rewards them. When they falter and under-perform the market responds accordingly."

The European Commission won a major antitrust victory over Microsoft last year when the Court of First Instance ruling backed its 2004 judgment fining the company €497 million for anticompetitive practices. In January the Commission launched a new case against the software giant.