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Intel accuses EC of mishandling antitrust evidence

Intel sharply criticized the European Commission, which found it guilty of anticompetitive behavior, accusing the regulator of being selective with evidence it looked at and, essentially, setting out to find the company guilty.

Intel's statement came on the same day the EC released a document that detailed e-mail exchanges between Intel and computer manufacturers. EC antitrust officials described the e-mail exchanges as “smoking gun” evidence in the probe, which resulted in the chip maker being fined $1.45 billion in May.

In its Monday statement, Intel attacked the EC's handling of the case.

“Intel has reluctantly concluded that the Commission initiated the investigation with a predisposed view to alter the results of competition, and consequently tended to assess the evidence with a prosecutorial bent to confirm its point of view. In doing so, it ignored or minimized — and indeed at times even refused to obtain — important evidence that contradicted its view of the world. The result was a consistently one-sided and result-oriented selection and interpretation of the evidence,” Intel wrote in the document, which is available on the chip maker's Web site.

The EC also failed to understand the competitive context of the x86 processor and PC markets and the way in which Intel competes with chief competitor Advanced Micro Devices, Intel said.

The Commission earlier ruled that Intel negotiated rebate deals with system manufacturers like Dell, Hewlett-Packard and Lenovo in order to shut out competition from its closest rival, AMD.

In the 518-page, nonconfidential version of the ruling, made public on Monday, the EC published e-mail messages as evidence of how Intel and PC makers negotiated deals to supply chips through rebate agreements. The deals discouraged PC makers from buying AMD processors, so they started using Intel chips almost exclusively, according to the ruling.

“Late last week Lenovo cut a lucrative deal with Intel. As a result of this, we will not be introducing AMD-based products in 2007 for our Notebook products,” a Lenovo executive wrote in a December 2006 internal e-mail, according to the text of the ruling. However, Intel denied the existence of any exclusivity conditions in the discounts it offered Lenovo.

Intel rebates to HP from November 2002 to May 2005 were offered on the condition that HP meet no less than 95% of its microprocessor needs for business desktops from Intel. In an e-mail written in July 2002, an HP executive wrote: “PLEASE DO NOT… communicate to the regions, your team members or AMD that we are constrained to 5% AMD by pursuing the Intel agreement.” The e-mail was written when Intel and HP were negotiating the rebate agreement.

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