Commission Publishes Details Of Investigation Which Led To Record Intel Fine

The European Commission has published many of the emails and documents on which the €1 billion antitrust fine it levied on Intel was based. The fine is being appealed through the courts by the US computer chip maker.

The Commission has published extracts of email sent by and to computer maker executives discussing the tactics allegedly employed by Intel to win and keep chip-supply contracts.

The Commission ruling, made in May, found that Intel had made secret payments and rebates to computer makers in return for their exclusive or near-exclusive use of Intel chips in machines. It said this broke EU competition law.

The emails that have just been published appear to demonstrate that computer makers' chip choices were not based on open competition but on a fear of losing Intel payments.

The Commission said that in an internal presentation in 2003 Dell executives were told that any switch to rival chips would cause retaliation from Intel which "could be severe and prolonged with impact to all LOBs [Lines of Business]".

The Commission quoted a Lenovo executive as saying in 2006: "late last week Lenovo cut a lucrative deal with Intel. As a result of this, we will not be introducing [competitor] AMD based products in 2007 for our Notebook products," according to the Commission.

The deals detailed by the Commission were not always entirely exclusive. It said that Intel told HP that it could use AMD chips in business machines, but only for small and medium sized business and only if they were sold directly.

"You can NOT use the commercial AMD line in the channel in any country, it must be done direct," it said an HP executive wrote in an internal 2004 email. "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."

Intel executives also used payment leverage to pressurise firms into delaying product launches, the Commission said. It said that both Acer and Lenovo delayed AMD-based products for months on Intel executives' instructions. "

"The deal is base[d] on our assumption to not launch AMD NB [notebook] platform," said a Lenovo executive in a 2006 internal email, it said. "Intel deal will not allow us to launch AMD."

Intel has appealed the Commission's ruling to the Court of First Instance, from where it can be appealed again to the European Court of Justice.

Intel has said this week that the ruling and the investigation are flawed. "The Commission relied heavily on speculation found in emails from lower level employees that did not participate in the negotiation of the relevant agreements, if they favoured the Commission’s case,” Intel spokesman Robert Manetta told the New York Times newspaper.