EU conducts antitrust raid on Intel, retailers

Workers prepare an Intel booth for the Consumer Electronics Show (CES) in Las Vegas, January 6, 2008. The European Commission conducted antitrust raids against Intel Corp's Munich offices on Tuesday and against retailers selling products of the world's largest chip maker, the Commission and the chip maker said.

SAN FRANCICSO (Reuters) - The European Commission conducted antitrust raids against Intel Corp's Munich offices on Tuesday and against retailers selling products of the world's largest chip maker, the Commission and the chip maker said.

The European Union watchdog's actions ratcheted up pressure on Intel and broke new ground by raiding Germany's huge Media Markt-Saturn and British electrical goods retailer DSG International Plc, which owns Dixons and Currys.

Intel has been preparing for a Brussels hearing on March 11 and 12 to answer pending charges it abused its dominance of the market for central processing units (CPUs) at the heart of every PC.

"Commission officials carried out unannounced inspections at the premises of a manufacturer of central processing units and a number of personal computer retailers," said Jonathan Todd, a Commission spokesman.

He said the Commission, accompanied by local law enforcement staff, conducted the raids because it had reason to believe the companies "may have violated EC (European Community) Treaty rules on restrictive business practices and/or abuse of a dominant market position."

Intel confirmed the raids.

"There has been a raid on our offices in Munich. As is our normal practice, we are cooperating with authorities," said Chuck Mulloy, a spokesman for the chip maker .

In London, British retailer DSG said it was part of the sweep as well.

"I can confirm that officials from the EU Commission are currently conducting an inspection at our Retail Support Centre in Hemel Hempstead," a DSG spokesman said in a statement.

Germany's Media Markt-Saturn also confirmed it was raided. It is a subsidiary of trading company Metro, which controls most of that country's retail electronics market and operates in other countries as well.

The raids come as Intel faces a closed hearing in Brussels next month on charges that it slashed prices below cost and offered huge rebates in an attempt to drive smaller competitor Advanced Micro Devices Inc out of the market.

The Commission was already investigating Media Markt-Saturn for its ties to Intel, acting on a reference from the German anti-cartel agency. The retailer sells PCs with Intel CPUs but not those by AMD.

The Commission is the EU's antitrust watchdog and has powers to fine companies up to 10 percent of their global annual revenue for competition abuses.

(Additional reporting by Jens Hack in Munich and Dan Lalor in London; Editing by David Holmes, Paul Bolding)