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Japanese Regulators Raid Intel Offices

Japan's Fair Trade Commission raided the offices of the Japanese unit of Intel on Thursday looking for evidence that the chip giant is illegally pressuring PC makers to avoid using competitors' processors.

Even as the Intel Developers Forum was underway nearby, FTC officials raided Intel K.K. headquarters in Tsukuba, Ibaraki Prefecture, along with offices in Tokyo and Osaka.

The FTC is investigating allegations that Intel is illegally pressuring PC makers not to use competitors processors, an FTC official said. Major PC manufacturers acknowledged that have been interviewed agency officials, but declined to comment further.

Intel also declined comment.

AMD Japan Ltd. and the Japanese unit of Transmeta also acknowledged that they have been interviewed by FTC investigators.

Intel Japan holds an overwhelming share of CPU market here for personal computers. IDC Japan reported that Intel held an 84.5-percent market share here in 2003 on a unit basis.

AMD and Transmeta declined to discuss their standing in the Japanese market. But market statistics imply that Intel has greater influence on the Japanese PC market than in other market segments. For example, Transmeta's latest CPU, Efficeon, the second generation of its low-power CPU, has so far garnered only one design win in Japan. By contrast, Efficeon is used in multiple models outside Japan.

Analysts estimate that AMD's share of the global PC processor market was about 18 percent in 2003, but only 15 percent in Japan on unit basis, according to a a Gartner Dataquest report cited by an AMD spokeswoman.

The FTC would recommend regulatory actions against Intel if it finds unlawful activity in the Japanese market. An industry source said the agency searches company offices here only when it is confident it will find evidence of wrongdoing.

Investigations usually take months. The FTC launched a similiar raid on Microsoft offices here in February. Investigators suspect the software giants is violating Japan's anti-monopoly law. That investigation is also ongoing.

This story courtesy of Internetweek.

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