Intel's legal woes unlikely to hurt bottom line

Intel's legal woes continue to mount, but despite the antitrust charges facing the world's largest chipmaker across three continents, most analysts do not expect the company to lose its top spot any time soon.

On Tuesday the Santa Clara, Calif., company confirmed four of its European offices were raided by investigators from the European Commission on charges Intel has systematically pursued monopolistic business practices.Investigators searched Intel's offices in Munich -- its European headquarters -- along with its offices in Madrid, Milan and Swindon, and in all cases they arrived unannounced at the crack of dawn."The investigations are being carried out within the framework of an ongoing competition case," said Jonathan Todd, the commission's spokesman.

An Intel spokesman said the company provided the investigators "with thousands of pages of documents and hundreds of hours of interviews," adding that "we will continue to cooperate with the commission."

Meanwhile, rival company Advanced Micro Devices welcomed the commission's efforts to examine Intel's business practices.

"Every computer user has a strong interest in ensuring that the full truth about Intel's anti-competitive abuses is revealed and corrected," said Thomas McCoy, AMD's legal affairs and chief administrative officer, in a news release."The European Commission dawn raids show that Intel cannot and should not escape the scrutiny of antitrust officials around the world -- nor can Intel escape the consequences of its anti-competitive actions, which raise prices, threaten innovation and harm consumers."Of course, the Sunnyvale, Calif., company's response to the probe comes as no surprise, because AMD, too, filed a lawsuit against Intel late last month with the U.S. Federal District Court of Delaware, accusing the company of deliberately preventing computer makers from using AMD semiconductors.Specifically, it alleged Intel had coerced 38 computer manufacturers -- including Compaq, Dell and Sony -- to use its chips in return for cash payments, in addition to using discriminatory pricing practices to punish those companies that used AMD chips instead of products made by Intel.

In addition, the Japan office of ADM filed two lawsuits against Intel last month for breaking Japanese antitrust regulations and seeks to be awarded a total of $55 million in damages.Last March, the Japanese Fair Trade Commission ruled Intel had been violating Japan's antitrust laws, and the company did not contest the ruling.Even as Intel's legal battles proceed, some analysts remained upbeat about the company's prospects.

Computer manufacturers "don't really make business decisions based on a popularity contest," said James Governor of Redmonk, a technology-industry analysis firm in London.Governor told United Press International that some manufacturers might turn against AMD rather than Intel for exposing the way business is done in the computer industry "and whining about it."Moreover, he said, it was unlikely consumers would boycott computers featuring Intel chips, no more than they stayed away from Microsoft products at the height of the software manufacturer's legal battle.Governor did, however, caution that as a result of the ongoing legal disputes Intel will likely have to beef up its legal team to deal with antitrust issues, which in turn will increase its bureaucracy."People point to IBM, and say it's bureaucratic and slow-moving ...but that's partly in response to its antitrust issues" in the past, Governor argued.

Copyright 2005 by United Press International. All rights reserved.

Related stories:

Report: E-Mail Archiving Becoming a Must
A new study projects that in four years, 70 percent of corporate mailboxes will be protected by archiving software—whether hosted or client-based.
Intel Gets More Time to Explain Lost E-Mails in Antitrust Case
A judge gives the company 10 more days to find missing evidentiary e-mails—or explain what happened to them—in antitrust lawsuit brought by competitor AMD.
Microsoft subpoenaed by AMD in Intel suit
Microsoft is the latest company to be subpoenaed by chip maker Advanced Micro Devices for its antitrust lawsuit against rival Intel Corp.
AMD sues Intel over monopoly abuses
AMD announced today that it filed an antitrust complaint against Intel Corporation yesterday in U.S. federal district court for the district of Delaware under Section 2 of the Sherman Antitrust Act, Sections 4 and 16 of the Clayton Act, and the California Business and Professions Code. The 48-page complaint explains in detail how Intel has unlawfully maintained its monopoly in the x86 microprocessor market by engaging in worldwide coercion of customers from dealing with AMD. It identifies 38 companies that have been victims of coercion by Intel – including large scale computer-makers, small system-builders, wholesale distributors, and retailers, through seven types of illegality across three continents.
Intel acknowledges new step in US antitrust probe
Computer chip titan Intel Corp. said Friday it had received a subpoena this week from US antitrust regulators after a two-year informal review on "competition in the microprocessor market."
Panel: CIOs Wary of Open-Source Enterprise Apps
Analysts and company representatives at the Linux/Open Source on Wall Street conference discuss the obstacles in the way of mainstream adoption of mission-critical open-source applications.
Online service to offer movies before DVD
Revelations Entertainment, an independent Hollywood movie distributor, has formed a new online movie service called ClickStar, which will offer a limited selection of downloadable movies before they are released on DVD.
California Scientists Wage Joint War on Internet Plagues
Computer scientists at the University of California, San Diego and the International Computer Science Institute, affiliated with UC Berkeley, have joined forces to launch a full-scale assault on viruses, worms and other plagues afflicting the Internet. With $6.2 million in funding over five years from the National Science Foundation (NSF) through its new Cyber Trust program, the scientists will develop technologies to detect, analyze and defend against large-scale Internet attacks.

News discussion:

Technology news