EU says issues charges against Intel

BRUSSELS Thu Jul 26, 2007 5:26pm EDT

A woman checks her mobile phone as she walks past an Intel Core Duo advertisement outside a computer shop in Beijing March 26, 2007. The European Commission issued formal charges against Intel on Thursday for allegedly using illegal tactics against smaller rival Advanced Micro Devices (AMD), according to people familiar with the situation. REUTERS/Claro Cortes IV

A woman checks her mobile phone as she walks past an Intel Core Duo advertisement outside a computer shop in Beijing March 26, 2007. The European Commission issued formal charges against Intel on Thursday for allegedly using illegal tactics against smaller rival Advanced Micro Devices (AMD), according to people familiar with the situation.

Credit: Reuters/Claro Cortes IV

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BRUSSELS (Reuters) - The European Commission issued formal charges against Intel (INTC.O) on Thursday for allegedly using illegal tactics against smaller rival Advanced Micro Devices (AMD), a European Commission spokesman said.

The Commission, the European Union's top antitrust regulator, has spent years investigating Intel's tactics to determine whether it acted unfairly to preserve its dominance over AMD (AMD.N).

"I can confirm the statement of objections has been sent," said Ton Van Lierop, a spokesman for the European Commission. Intel had no immediate comment.

The two companies make all the central processing unit (CPU) chips at the heart of the world's 1 billion personal computers and servers.

The formal charges are contained in a statement of objections (SO).

AMD has sued Intel in the United States, South America and other jurisdictions, but no judgments have been made by courts.

On July 19, AMD posted a 13 percent rise in quarterly revenue, but nonetheless reported a $600 million loss.

AMD gained market share against Intel in 2005 and most of 2006, but suffered a downturn later last year when Intel rolled out powerful new processors and cut prices on older models.

AMD's market share at the end of 2006 was 25 percent of unit shipments for x86 processors that act as the brains for almost all the world's personal computers.

But by the end of March 2007, AMD had slipped to less than 19 percent, according to market research firm Mercury Research.

AMD's stock has fallen this year while Intel's has risen.

Intel has had some past government challenges. It settled charges with the United States Federal Trade Commission in 1999 and the FTC dropped an additional investigation about the firm's marketing practices in 2000.

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