Legal News

Emails, EU Alleges, Show a Vengeful, Lawbreaking Intel

By Ashby Jones

Hell hath no fury like a leading computer-chip maker scorned.

That’s the conclusion meant to be derived by a report released on Monday outlining the European Union’s antitrust case against chip-maker Intel. In May, the EU levied a record €1.06 billion ($1.56 billion) against Intel, alleging Intel abused its dominant position in the microprocessor market.

On Monday, the EU published a 518-page document that detailed its case. In emails included in the document, executives from PC makers fretted that Intel would cut lucrative rebates if the PC makers used chips from rival Advanced Micro Devices Inc. in too many computers. Taken collectively, the emails build a portrayal of a company that had the muscle — and the will — to lash out at customers that weren’t sufficiently loyal. Intel holds 77 percent of the global market for computer chips, by buying from A.M.D., Intel's only serious rival, with 23 percent.
Click here for the WSJ story; here for the NYT story; here and here for earlier LB coverage.

In one email among dozens cited, a Dell executive worried in February 2004 about the ramifications of giving business to AMD, which had a hot new chip on the market.

“It looks 100% certain that Intel will take [rebates] to ZERO for at least one quarter while they ‘review all of the numbers and implications,’” he wrote. Typically, Intel gave customers rebate payments based how much they purchased.

In another email, an executive of China’s Lenovo Group Ltd. told colleagues he was negotiating a “special deal” valued at “millions of dollars” in exchange for giving Intel “all business of shipments for the rest of this calendar year.”

Intel has been investigated for years by antitrust enforcers on three continents, and AMD is also pursuing a private suit in U.S. federal court.

Intel has appealed the EU’s decision. In a statement Monday, the company said the regulator had cherry-picked evidence, drawn conclusions that were “wrong, both factually and legally” and “relied heavily on speculation found in emails from lower level employees that did not participate in the negotiation of the relevant agreements.”

An Intel spokesman, Chuck Mulloy, said that the author of the Dell email about rebates was a “planning person” not involved in key meetings. Mulloy added that Intel “never, ever threatened Dell with anything.”

Full post as published by Law Blog - WSJ.com on September 22, 2009 (boomark / email).