The European Union is defending its decision to fine Intel $1.45 billion for anticompetitive behavior. Its European Commission released the contents of internal documents from Intel customers providing evidence.
The documents were released after Intel alleged the EC did not have its facts straight. The contents indicate that Intel illegally gave rebates to computer manufacturers, including Dell, Hewlett-Packard , NEC and Lenovo, on condition that they buy all or most of their x86 processors from Intel.
Intel formally appealed the fine on July 22.
Rebates and Restrictions
The EC's documents indicate Intel asked Hewlett-Packard, Acer and Lenovo to stop or delay the launch of specific products with Advanced Micro Device x86 CPUs.
HP told the commission that Intel granted credits to the company subject to a requirement that the computer maker purchase at least 95 percent of processors for its business desktop systems from Intel and sell AMD -based desktops only to small and midsize businesses, only via direct distribution channels (not through distributors), and postpone the launch of its first AMD-based business desktop in Europe by six months.
An internal e-mail from an HP executive says, "You can NOT use the commercial AMD line in the channel in any country, it must be done direct. If you do and we get caught (and we will) the Intel moneys (each month) is gone (they would terminate the deal). The risk is too high."
In a February 2004 internal presentation, Dell noted that should the company switch any part of its CPU processors from Intel to AMD, Intel retaliation "could be severe and prolonged, with impact to all lines of business."
The EC also said Intel paid Europe's largest computer retailer, Media Saturn Holdings, to stock only computers with Intel chips from October 2002 to December 2007.
"It was clear to MSH in this regard that the sale of AMD-equipped computers would result at least in a reduction of the amount of Intel's contribution payments per Intel CPU under the contribution agreements (and thus in a reduction of the total payments received from Intel, even if the total volume of Intel CPUs sold by MSH would have remained the same as in previous periods), although MSH never actually tested the issue with Intel," MSH said in a submission to the commission. (continued...)
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