Could EU Antitrust Ruling Impact Intel's U.S. Case?

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The European Union is reportedly preparing to hit Intel with a record antitrust fine later this week, leading some stateside observers to wonder what that might mean for similar legal proceedings the microprocessor giant faces in the United States.

"I think it's tremendously important. I think the EU will provide a road map for enforcement in the U.S.," said David Balto, a Washington, D.C.-based antitrust attorney and former policy director in the Federal Trade Commission's Bureau of Competition. Balto said the Obama administration's Monday pledge to crack down on antitrust behavior also could give Intel pause.

The Obama team sent a message Monday that it plans to be far more hands-on when it comes to enforcing antitrust policy than the previous administration. The Justice Department "will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers," said Christine Varney, an assistant attorney general and head of the department's Antitrust Division, in a speech at a Washington think tank.

Intel, headquartered in Santa Clara, Calif., has been under investigation by EU antitrust regulators since a 2001 complaint by Advanced Micro Devices, Intel's main rival in the x86 microprocessor market. The investigation has focused on accusations that Intel violated anticompetition rules by pressuring computer retailers not to sell AMD-based computers via retroactive rebates, with formal charges brought against Intel by the EU executive in 2007. AMD, based in Sunnyvale, Calif., filed additional charges in 2008, claiming that Intel made outright payments to retailers to lock out AMD products.

Intel could face a fine of up to 10 percent of its annual revenue, or about $3.76 billion, in a European Commission ruling reportedly set to be announced in Brussels, Belgium, on Wednesday. Sources cited in numerous media reports say they don't believe the commission will issue the maximum fine, but many believe it could exceed the record $1.35 billion charge levied against Microsoft in 2008 for failure to comply with a March 2004 antitrust decision.

The chip giant, having already been penalized in recent years by antitrust authorities in Japan and South Korea, faces a number of similar actions in the U.S. Intel faces a complaint from AMD and an associated class-action suit, set to go to trial in Delaware in March 2010. The FTC and the New York state attorney general's office also are investigating Intel on antitrust grounds.

Next: What Happens In The EU May Not Stay In The EU

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