Chipmaker Intel under competition panel’s scanner

Bindu D Menon New Delhi | Updated on November 20, 2012 Published on November 20, 2012

Former distributor eSys complains of unfair trade practices, monopolistic behaviour

The Competition Commission of India is probing chip-maker Intel for alleged unfair trade practices and monopolistic behaviour. Acting on a compliant by its former distributor eSys Technologies, the Commission has reportedly sent notices to Intel.

Sources in CCI said the agency may probe Intel under Sec 3 and 4 of the Competition Act that deals with abuse of dominant position and anti-competitive agreement.

When contacted Intel South Asia spokesperson Surendra Chawla said, “There is a long-standing commercial dispute between Intel and eSys. eSys has complained to regulators. As is our normal practice we are cooperating with the regulators. We believe our business practices have been and are legal.”

Second time

This is the second time the US-based chipmaker is being investigated for alleged anti-competitive practices in the country. Earlier, rival chipmaker AMD had approached CCI against Intel for allegedly influencing Government’s tendering process.

Intel had been also been probed by Competition watchdogs in Europe and North America. In Europe, anti-trust regulators had fined the company $1.4 billion in 2009.

The European Commission asserted that Intel competed in a manner that transgressed the antitrust laws of the European Community, by discounting its prices, purportedly at below cost levels, to win all or most of the business of five major computer manufacturers, on the implied condition that those customers buy all or most of their microprocessors from Intel.

Intel’s response

Intel, however, said that it never sells products below cost and did not do so in the instances cited by the Commission. “What we are able to do – legally and to the benefit of consumers – is to discount products significantly to compete in our highly competitive marketplace, where AMD also competes aggressively on price,” Intel had said in response to the European regulator’s ruling.

When Intel did offer discounts in the form of rebates, it did not offer them on the condition that customers purchase all or most of their microprocessors from Intel (as the Commission found) nor did Intel condition rebates on a customer not using AMD microprocessors, it said.

Published on November 20, 2012
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