Ombudsman Criticizes EC over Intel Investigation

An ombudsman with the European Union says the European Commission erred in its investigation of Intel by failing to take minutes of a 2006 meeting with a Dell executive. The EC in May fined Intel $1.45 billion for anticompetitive practices, but Intel is appealing the ruling. Intel executives have characterized the EC as conducting a biased investigation.

An ombudsman with the European Union criticized the EU's antitrust regulatory agency for not properly recording a meeting during its investigation of Intel.

In a ruling Nov. 18, Ombudsman Nikiforos Diamandouros accused the European Commission of "maladministration" for failing to take minutes during a meeting with a Dell executive three years ago during its investigation of anticompetitive practices.

The investigation led to the EC in May fining Intel $1.45 billion for such practices, saying Intel issued rebates and other payments to OEMs in exchange for the system makers limiting their use of products from rival chip maker Advanced Micro Devices.

As part of that investigation, EC regulators met with a senior executive at Dell on Aug. 23, 2006, according to Diamandouros' report. Even though the meeting was about the antitrust investigation into Intel, the EC did not take minutes of the meeting, make proper notes of the meeting or have an agenda on file, leading to the maladministration, according to a statement on the European Ombudsman Website.

However, Diamandouros did not agree with Intel that the EC investigators hampered the chip maker's defense by encouraging Dell to make an information exchange agreement with AMD.

The EC disputed the ombudsman's finding.

Intel has said the finding will be part of its appeal of the EC fine. Intel executives have criticized the European regulators for conducting a biased investigation by ignoring evidence that is favorable to Intel.

The EC investigation is one of several legal challenges Intel faces regarding its business practices over the past decade. The N.Y. Attorney General's office has filed a lawsuit against Intel, claiming it used payments and coercion against such OEMs as Dell, Hewlett-Packard and IBM to limit their use of AMD processors in their products.

The Federal Trade Commission also reportedly is conducting an investigation.

However, Intel closed a significant chapter in its legal battles Nov. 12 when it and AMD settled their private lawsuits. Part of the settlement required Intel to pay AMD $1.25 billion, money that AMD reportedly will use to pay off some debt.