Intel Prepares to Fight Two-front Antitrust Battle

With members of the European Commission asking EU Commissioner for Competitiveness Neelie Kroes to begin formal antitrust charges against Intel, the company finds itself preparing to cooperate on the investigative front while, at the same time, maintaining a hard line on the judicial front.

The judicial case brought against Intel last year by AMD now centers on whether Intel, by allegedly making exclusivity deals with German resellers, drove down demand for AMD processors so much that the Texas-based CPU company was forced to cancel plans to build fabrication facilities in the US that could serve both US and European customers. Much of AMD's case was thrown out, but a federal district court judge is now interested in hearing AMD at least attempt to substantiate the remainder of its case.

While antitrust cases before the European Commission are typically brought forth by multiple competitors, bolstered by non-profit firms that represent public interests, in this case, the list of Intel's possible aggrieved parties is admittedly thin. Intel corporate offices there were raided a year and a half ago, though hard evidence against the company's actions has yet to be made public. Commissioners are apparently saying the time for that publicity is now, and may be using the press to apply extra leverage on Kroes to get moving.

So Intel has to play it cool and careful for now. Spokesperson Chuck Mulloy told Reuters late yesterday, "Intel has not been informed about any new developments in the EU investigation. We believe the investigation is continuing and we plan to continue to cooperate."

But this might be a difficult task: specifically, maintaining the appearance of graciousness before the EC while holding on to a tough stance in the AMD case that very nearly won Intel a full dismissal.

How will Intel continue to keep these matters separate?

We asked Chuck Mulloy, who told BetaNews this afternoon, "The EU investigation is just that, an investigation. We are responding to investigators' questions and communicating with them regularly. On the other hand, the case in U.S. District Court is an ongoing litigation. The parties are in the early stages of discovery with a long road ahead of us.

If the EC does step up its investigation against Intel - for instance, by making some charges public - won't that be seen as a validation of at least the spirit of AMD's allegations? "I think from a legal perspective these are clearly distinctive issues," Mulloy responded to BetaNews, "different venues, laws, regulations. One is an investigation driven by regulators, the other is a private litigation driven by the plaintiffs. (Remember there are also 70-plus class-action cases pending with the AMD complaint in Delaware.) So we need to address each matter in a fashion that is appropriate for the jurisdiction and the nature of the issue. If its litigation, we'll defend ourselves. If its an investigation we'll cooperate and explain our position and practices."

There clearly is a common thread, Mulloy conceded, between all the pending complaints against the company, including litigation here as well as in Europe and Japan, along with governmental investigations in Europe and Korea. "That common thread is AMD," Mulloy said, "with the same complaints, the same allegations, the same claims just tailored for a different venue or jurisdiction. The EU investigation is driven solely based on AMD complains beginning six years ago. In short, one doesn't validate the other; it's just the same complaints in other venues.

"We, of course, deny any wrongdoing, believe our business practices are both fair and lawful, and believe that this very competitive market works," added Mulloy. "Both companies are rewarded or punished by the market based on our abilities to execute."