US chip-maker Intel, already under scrutiny in Europe for alleged anti-competitive practices, faces new charges this week. European regulators say Intel abused its dominant market position to squeeze out its main rival.
Intel has a lock on the European chip market.
The European Commission said that it had sent another so-called "statement of objections" to Intel alleging it has tried to exclude its leading competitor Advanced Micro Devices, Inc. (AMD) from the x86 central processing unit (CPU) market.
The letter, sent late Thursday, July 17, accused Intel of having offered discounts to a major European personal computer distributor to favor its product. Intel also allegedly paid a PC maker to delay marketing a model line using AMD chips. It also paid the same un-named PC maker to use Intel's own microprocessors over those of AMD.
Intel controls 80 percent of the global market for the central processing units. The company's 2007 sales were 24 billion euros ($38 billion.)
Without naming other companies involved, regulators said in a statement they had reached a "preliminary conclusion" that Intel has engaged in "abusive conduct" during the past year. The action follows a similar warning sent to the company in July 2007 for anti-competitive practices.
Intel denies charges
Did Intel go too far in its bid to win business?
The EU wants to prevent below-cost or predatory pricing, which regulators say kills off competition and stifles innovation.
The European Commission gave Intel eight weeks to reply and attend an oral hearing, and reserved the right to levy fines. It said each charge in and of itself was serious, but taken together they "reinforce each other and are part of a single overall anti-competitive strategy aimed at excluding AMD or limiting its access to the market."
California-based Intel said it was disappointed by the new charges. Intel said it has always conducted itself legally and with a sense of fair competition.
"It's clear that the allegations stem from the same set of complaints that our competitor, AMD, has been making to regulators and courts around the world for more than 10 years," Intel said in a statement.