Time for anti-trust regulators to get tough

It's a bit of a stuck record, but the European Commission is once again leveling anti-trust allegations against Intel

Tags: Advanced Micro Devices IncorporatedEuropean CommissionOEMs
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By  Mark Sutton Published  July 20, 2008

It's a bit of a stuck record, but the European Commission is once again leveling anti-trust allegations against Intel. The new allegations are pretty much the same as the old ones - Intel has abused its dominant market position to try and put AMD out of business, through offering rebates and payments to OEMs and retailers that would give preference to Intel products, or not use or sell AMD products.

The latest allegations build on a statement of objections that the EC issued last year, and while the allegations are serious, they don't add anything new to the EC's action. But the new accusations add to a growing arsenal of anti-trust allegations that are leveled at Intel, in Europe, the US, Korea and Japan.

In the US, the latest exchanges between Intel and the US Federal Trade Commission, over missing internal emails from Intel, either suggest that Intel's record keeping has been fairly lax, or that they are trying to hide something.

Not everyone thinks that the anti-trust actions against Intel are worth continuing. Jack Schofield, writing for the Guardian, argues that the European anti-trust actions are just an artificial way of hitting Intel in the pocket to maintain some sort of balance between Intel and AMD.

Intel's alleged behaviour goes beyond just generous rebates. Paying a partner to not do business with your rival, or to delay projects with a rival, is underhanded and a blatant abuse of market dominance.

There is no question that AMD has its work cut out in competing with Intel. The company has just posted its seventh consecutive quarter of losses, and CEO  Hector Ruiz has been pushed into an executive chairman role. The purchase of ATI is proving to be a big financial burden on the company. But AMD is not a failed company that needs propping up by regulators. The two chip companies keep on leap-frogging each other on technology, and AMD is chipping away at Intel's lead, according to some analysts.

But if the anti-trust regulators really have so much evidence stacked up against Intel, then its about time they got on and took action. The large number of actions around the world would seem to suggest that Intel's behaviour does represent a coherent strategy against AMD, and if that is the case, then there is no point in having anti-trust actions that lumber on for years, or even decades. Balance, in the form of an end to manipulation of OEMs and retailers, needs to be restored to the chip business as soon as possible.

While Microsoft's anti-trust actions took a different tack to Intel's, the remedies came too late for some of the smaller software companies. Competitors like Apple and Mozilla have, in part, restored the balance in sectors like browsers and media players, but the CPU industry is very different from the software industry. Regulators need to take swift action to create a fair market while there is still competition in the markets to preserve.

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