by CIO Staff

Intel May Face New Investigation in Germany

Jul 11, 20063 mins

Intel could face a new investigation over its business practices after a complaint was filed in Germany’s federal cartel office last week, a spokeswoman for the office said.

The cartel office, or competition authority, received a complaint late last Thursday about Intel business practices that could run against Germany’s competition laws, said Irene Sewczyk, a spokeswoman for the authority. She would not provide further details or identify the company that filed the complaint, saying only that it is an Intel competitor.

The complaint was filed shortly after a report appeared July 3 in the German edition of the Financial Times, concerning a letter from Media Saturn Holding, the company behind the Media Markt chain of retail electronics stores. The letter cites an agreement in which Media Markt agreed to sell only Intel-based products in return for payment by Intel, according to the paper. At the time of the report, the cartel office would not confirm any complaint had been filed over the matter.

Rival Advanced Micro Devices (AMD) has already filed complaints against Intel in the United States, Europe and Asia over alleged unfair sales practices. AMD accused Intel of using its dominance in the PC processor market to coerce computer makers, distributors and other partners into selling exclusively Intel-based products. Intel has denied any wrongdoing.

AMD would not say Tuesday if it was behind the complaint filed last week in Germany. “We have spoken with the federal cartel office in Germany, just as with other authorities around the world, and we will support the cartel office’s investigation,” said AMD spokeswoman Hollis Krym.

Media Markt, which has about 400 stores in 12 European countries, was among the companies cited by AMD in its complaints against Intel last year. The retailer for a long time carried only Intel-based PCs in its stores, and received US$15 million to $20 million of market development funds from Intel annually, AMD said in its complaint.

While AMD has no knowledge of the letter from Media Markt’s parent company referred to by the Financial Times, “we have evidence that appears to cover similar communications,” Krym said.

An Intel spokesman in Germany said he was not aware of a complaint having been filed with the German authorities. “We are working with all the authorities in Brussels and here in Germany,” said Intel spokesman Mathias Raeck. “We believe that we have a lawful business conduct.”

A spokesman for Media Saturn Holding, Bernhard Taubenberger, said the company does not comment on ongoing legal proceedings.

The German competition authority is examining the complaint to determine whether the allegations are the same as those being investigated by the European Commission. If they are, it will forward the complaint to the commission, Sewczyk said. If the complaint is different and is focused on the German market, the office will launch its own investigation. If the complaint is wider, it will forward the complaint to the commission for consideration, she said.

A U.S. court is reviewing the scope of AMD’s lawsuit against Intel filed last year, Krym said. Earlier this year, the European Commission raided several Intel offices in relation to an investigation that it began in 2001 into Intel’s business practices. Korea is also investigating Intel based on anticompetitive charges.

-Nancy Gohring, IDG News Service (Dublin Bureau)

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