Intel denies sales tactics were illegal

Janet Babin May 13, 2009
HTML EMBED:
COPY

Intel denies sales tactics were illegal

Janet Babin May 13, 2009
HTML EMBED:
COPY

TEXT OF STORY

Kai Ryssdal: The world’s biggest computer chip-maker got slammed with the world’s largest antitrust fine today. The European Union fined Intel almost a billion-and-a-half dollars for what it calls illegal sales tactics. Intel and its main rival — AMD — have been tussling for years. Janet Babin reports from the Marketplace Innovations Desk at North Carolina Public Radio.


JANET BABIN: If you have a PC, chances are good that Intel made the chips that make it work. The company controls at least 70 percent of the market.

But it’s not in trouble for being the biggest. It’s in trouble for allegedly abusing its plum position. The EU charges that Intel acted unfairly to squeeze out AMD. Eleanor Fox is a law professor at NYU:

Eleanor Fox: Intel inaugurated a lot of practices that would tend to keep the customers, buying from Intel and not buying from AMD.

Like offering steep rebates to customers who bought only Intel chips. And paying computer makers to delay the launch of products containing chips made by Intel’s rivals.

Richard Donovan co-chairs the antitrust law practice at Kelley, Drye and Warren in New York. He says what Intel did would be illegal on either side of the Atlantic.

Richard Donovan: We call it monopolization, whereas in the European Union and some other countries they call it an abuse of dominance. But it is the same thing and very much the same kind of standard.

Intel is under investigation by the Federal Trade Commission and the New York Attorney General’s office.

The new head of antitrust at the Department of Justice, Christine Varney, signaled this week the Obama administration will be tougher on antitrust questions. Again Richard Donovan:

Donovan: She took the occasion to emphasize that under her administration, they were going to look more closely at monopolists and monopolistic activity.

Intel says it will appeal the EU ruling.

I’m Janet Babin for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.