Intel Corporation: European Union Antitrust Case
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Case Code: ECON030 Case Length: 25 Pages Period: 2001-2009 Pub Date: 2009 Teaching Note: Not Available |
Price: Rs.400 Organization : Intel Corporation Industry : Computers, IT and ITeS Countries : USA Themes: Pricing, Competition |
Abstract Case Intro 1 Excerpts
Excerpts
Background Note
Intel was headquartered in Santa Clara, California, USA. For the year ended 2008, it recorded revenues of US$ 37.6 billion. (Refer to Exhibit II for Intel's financials)..
Intel's Initial Troubles with the EC
In 2001, the EC began investigations into Intel's business practices after AMD lodged a complaint that the company was misusing its market dominance in the microprocessors market and violating the EU's competition rules (Refer to Exhibit VI for EU's competition policy)...
EC Issues 'Statement of Objections'
While Intel received a clean chit from the EC for its business practices, AMD submitted 'proof' to the EC against Intel's anti-competitive business practices, in 2003. Though the EC did not disclose what evidence AMD had provided, it began investigating Intel again in June 2004...
EC Issues 'Supplementary Statement of Objections'
In February 2008, as part of its continuing probe against Intel's anti-competitive business practices, the EC raided Intel's offices located in Germany. Commenting on the raids, it said, "Surprise inspections are a preliminary step in investigations into suspected infringements of EC competition law."...
Appeal to the Court of First Instance
In August 2008, Intel wrote a letter to the Directorate General for Competition (DG-COMP) requesting it to ask AMD to produce documents to substantiate its allegations against Intel of anti-competitive business practices...
Intel Responds to the SSO
Intel filed a response to the SSO, on February 5, 2009, soon after the CFI had rejected its appeals. In its response, Intel made a request for an oral hearing with the EC...
EC Slaps Fine
On May 13, 2009, after having conducted investigations for several years, the EC concluded that Intel had "violated EU competition rules by exploiting its dominant position with a deliberate strategy to shut out AMD."...
Intel's Response to EC's Decision
The fine imposed by the EC came as a shock to Intel. The company felt that the EC's decision was wrong and said it would appeal to a European Court in Luxembourg. The company maintained that it had not done any harm to consumers. According to Otellini, "There has been absolutely zero harm to consumers. Intel will appeal."...
The Road Ahead
In view of the EC ruling, some analysts contended that the overwhelming market share that Intel enjoyed was due to its anti-competitive practices. They felt that its market share had become a major impediment to innovations in the microprocessors industry...
Exhibits
Exhibit I: Chronology of Events in the Intel – EU Antitrust Case
Exhibit II: Intel's Financials
Exhibit III: Intel's –Product Innovation and Marketing
Exhibit IV: Intel's Products
Exhibit V: A Brief Note on AMD
Exhibit VI: EU Competition Policy
Exhibit VII: Intel's Allegedly Abusive Marketing Practices between 2002 and 2007
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