EU antitrust officials raid Intel

update European regulators raided the offices of Intel and a number of PC-related companies early Tuesday as part of an antitrust investigation into the chip giant.

As part of the dawn raid, European Commission officials and national competition authorities in Milan, Italy; Munich, Germany; Madrid, Spain; and Swindon, England, descended on several Intel offices, a Commission representative said and an Intel representative confirmed. The officials also visited a number of companies that manufacture or sell computers.

"These inspections are being carried out within the framework of an ongoing investigation," a Commission representative said.

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Intel said it is cooperating fully with investigators.

"Our normal business practice is to cooperate, and we are doing (that) so far in this case," Intel representative Chuck Mulloy told CNET News.com. "We firmly believe that our business practices are fair and lawful."

The United Kingdom's Office of Fair Trading, or OFT, said that it had assisted the European competition authorities in an "on-site inspection" of Intel's Swindon offices.

"It is really a European Commission matter," said an OFT spokeswoman. She said the inspection was likely to have been carried out under article 81 of the EC Treaty, which prohibits price fixing and other distortions of competition within the European Union. The spokeswoman could not say whether anything was removed from Intel's offices.

The investigation comes just weeks after rival Advanced Micro Devices filed suit against Intel, alleging the chip giant has used scare tactics and coercion to prompt computer makers and other companies to use Intel's chips instead of rivals'. Intel's chief executive, Paul Otellini, has said that he expects his company to come out on top in the dispute.

In the European inquiry, other PC makers and retailers were reportedly questioned.

Dell, which exclusively sells products based on Intel chips, said the company's headquarters in Bracknell, England, were visited Tuesday by officials from the Commission's competition division. But the company declined to give details of what the officials were doing or the nature of the visit.

As of 5:30 p.m. local time, Commission investigators were still on the premises and Dell was cooperating fully, said Claire Ramage, a Dell representative in Europe.

European representatives of Hewlett-Packard said that the company's offices were not visited by Commission officials on Tuesday. IBM representatives were not immediately available to comment.

Other PC makers had little to say. German electronics retailer MediaMarkt declined to state its relationship with either Intel or AMD. And DSR Retail, the parent company for U.K.-based online retailer Dixons, declined to say whether it was visited as part of the probe, but reiterated its earlier stance that a reference to Dixons in AMD's complaint against Intel is factually incorrect.

A source familiar with antitrust issues predicted that Intel will not have much to say about the probe right away.

"Normally, these companies are pissed when their offices are raided, but there is nothing they can do about it," the source said. "They see

what investigators have come up with and what is being accused...before they contact" authorities with an explanation.

In most cases, investigators search through hard-copy documents and computer files, the source noted.

An AMD spokesman praised the Commission's raid.

"The strong steps taken by the European Commission today shows Intel cannot escape the scrutiny of antitrust officials around the world, nor the consequences of anticompetitive actions," said Mike Simonoff, an AMD spokesman.

A history of disputes
AMD filed its suit against Intel on June 24. A few days later, AMD Japan filed suit against Intel K.K., the chip giant's Japanese unit.

But AMD's recent lawsuits are only the latest battle the company has waged with Intel, and the smaller chipmaker in fact urged the European Commission to look at its rival. AMD complained to European antitrust regulators five years ago, alleging that Intel was engaging in "abusive" marketing programs. But the investigation remained relatively quiet for a couple of years.

AMD filed a new complaint with the Commission last year, and after a raid of Intel's offices by Japanese officials as part of a separate inquiry, European antitrust regulators said they were taking a close look at Intel and sent out 64 letters of inquiry to computer makers and retailers.

Japanese officials had made the findings of their raid available to antitrust agencies in other countries.

Intel reached an agreement a few months ago with Japan's Fair Trade Commission, which called on the chip giant to stop requiring PC makers to limit the use of competitors' chips in exchange for discounts. Intel agreed to abide by the recommendations, though the company said it disagreed with the agency's findings and conclusions.

Also last year, European officials said they would investigate the practice of some member states' procurement policies, which restricted computer purchases to only those that used Intel chips.

Graeme Wearden and Matt Loney of ZDNet UK contributed to this report.