Intel has been accused by South Korea’s Fair Trade Commission for potentially breaking antitrust laws and, according to local reports, faces fines as much as 3% of its annual revenues.
No charges have yet to be filed, but the commission is suspicious of Intel’s abuse of its dominant market power in the country following its two-year investigation into the chipmaker’s business in the country.
Intel maintains its business practices are pro-competitive and, ultimately beneficial to consumers and it plans to respond to the preliminary allegations, said company spokesperson Chuck Mulloy. Should the commission adopt a position that’s adverse to us, we have rights to take into the Korean judicial system. Right now we’re at an administrative phase.
The investigation, which is focused on the Korean market, made headlines in February 2006 when the commission conducted raids on Intel’s offices in Korea.
Intel’s business practices continue to be investigated elsewhere. Less than two months ago, the European Commission said Intel broke European antitrust laws by giving customers illegal rebates in order to prevent them from buying product from rival Advanced Micro Devices. In March 2005, Japan antitrust regulators told Intel to remove exclusivity clauses from its contracts. Following this order, AMD filed suit against Intel in Japan.
And in June last year, AMD sued Intel in the US for allegedly acting illegally to secure its more than 85% market share in the microprocessor market. AMD said Intel used exclusionary business methods with its customers to prevent them from buying chips from AMD, while Intel denied any wrongdoing. The case is set to go to trial in 2009.
Following formal action in Japan and Europe, global scrutiny is increasingly focused on Intel’s harm to competition and consumers alike, said AMD EVP of legal affairs Tom McCoy, in an emailed statement yesterday. Governments around the world must enforce antitrust laws to bring fair and open competition that will benefit computer manufacturers and buyers everywhere.