The naked truth?
Last week, Intel submitted its formal appeal against the billion euro fine imposed on it by the European Commission (EC), for violating antitrust rules on abuse of a dominant market position.
In its appeal, Intel sought to either have the decision annulled or have the fine reduced and to have the EC pay its legal costs. The reasons it gave was that the EC conclusions were both legally flawed and failed to meet the required standard of proof.
Presumably in response to this, the EC has today published a non-confidential version of its decision. It summarises that Intel engaged in "two types of illegal practice to exclude competitors from the market for computer chips called x86 central processing units (CPUs)." These actions, it claims, harmed consumers by preventing competition on equal terms and thus reducing choice.
In its appeal, Intel focuses on the concepts of ‘conditional discounts' and ‘naked restrictions' as used in the EC decision, as flawed. In the copy of the decision published today, the EC details conditional rebates given to Dell, HP and NEC between 2002 and 2005, Lenovo in 2007 and Media Saturn Holding (Media Markt and Saturn) between 2002 and 2007.
The naked restrictions detailed concern Intel offering rebates to the likes of HP, Acer and Lenovo on the condition that they restrict their business with AMD. The decision also claims Intel tried to conceal the conditions of the arrangements mentioned and details how big a threat to Intel AMD was at the time of all this activity.
It's not clear how effectively the EC has addressed Intel's legal objections, but today's release is at the least, pretty negative PR for Intel. It even details a submission to the EC from HP, in which HP stated that it "can confirm that Intel's inducements (in particular the block rebates) were a material factor in determining HP's agreement to the unwritten conditions. As a result (...) HP [Business desktop PC division] stayed at least 95% aligned to Intel."
This announcement adds to the tide of noise coming from Intel's competitors as they try to steal the initiative from the chip giant at the start of IDF 2009. The pressure is now on Intel to deliver some pretty positive and exciting news of its own. Watch this space.
UPDATE - 17:40 21 September 2009: Tom McCoy, AMD Executive VP for legal affairs has issued the following response to the published EC decision.
"This is the first time that Intel has had to confront now publicly available facts of its illegal behavior and it won't be the last. The U.S. FTC and New York Attorney General's continuing investigations and AMD's civil case against Intel will provide other clear demonstrations of Intel breaking the law, and we remain confident that we will win our US civil case against Intel, which goes to trial in March."
