Intel Legal Woes Grow

A raid in Germany and recent announcement from New York investigators has compounded the chip maker's legal concerns.

Intel's legal troubles continue to multiply.

While the company's product roadmap appears stable and robust these days, the issues of whether Intel is abusing its market position and its status as the world's top microprocessor producer seem to be drawing an equal number of headlines.

On Feb. 12, the European Commission raided Intel's offices in Munich, Germany, as well as several of the continent's larger electronics and PC retailers, including Media Markt and two other suppliers. This latest action by the European Commission-the antitrust enforcement arm of the European Union-comes just a few weeks before Intel is expected to answer charges that it has abused its market position by offering deep discounts to PC makers that stifle competition.

The EC's actions follow the Jan. 11 announcement from N.Y. Attorney General Andrew Cuomo that his office would investigate whether Intel used rebates and other tactics to force PC vendors to select its chips instead of those made by Advanced Micro Devices.

These events, coupled with other inquiries in Japan and South Korea, seem to suggest that some regulatory agencies have decided to place Intel under the microscope to determine if the company truly does abuse its market position. AMD has been making that argument for years and plans to detail its complaints in a federal lawsuit that is scheduled to go to trial in 2009.

"This is an important escalation and expansion of the [European] Commission's investigation into Intel's illegal business practices and the resulting harm to consumers," said AMD spokesperson Michael Silverman, referring to the raids in Germany.

For some, the continued pressure from the EC, along with the interest of the N.Y. Attorney General's Office, could force Intel to change some of its practices, such as its discounts to OEMs. This could in turn have an affect on the PC market. After Japan ruled against Intel, Toshiba--a stalwart buyer of Intel chips for years--began offering laptops that use AMD microprocessors.

Intel's reaction to these actions by authorities in Asia, Europe and the United States remains unclear. The company rarely comments about its legal affairs other than to say it cooperates fully with all investigations.