EC probes Intel licensing practices

"We have received a request from the European competition authorities for information on our policies in licensing our bus architecture for Intel processors," said Intel spokeswoman Gillian Murphy.

The Commission said in a statement that it has asked Intel to react to allegations that the hardware vendor in its marketing practices abused its dominant position in the microprocessor market for Windows-based computers.

Citing the "confidential" nature of the inquiries, Murphy declined to specify what questions the Commission is seeking answers to, when the request was made, or when Intel will respond.

However, the Commission said it is already examining the US chip giant's replies and that the probe was triggered by two complaints against Intel. Requests for information have also been sent to several PC makers and retailers, according to the Commission statement.

"We believe our practices are both fair and lawful," Murphy said, adding that Intel will cooperate with the regulatory agencies.

Noting that the investigation is in a very early stage, the Commission said that it has not found that Intel acted against European Union competition law. There is no strict timetable for the conclusion of the antitrust investigation.

In a PC, the bus interconnects the microprocessor with the motherboard and components attached to the motherboard, such as hard disk drives, and graphics adapters. Intel's bus architecture is part of the company's intellectual property and is licensed to PC builders. PC manufacturers who used processors from Intel's rivals were allegedly denied access to design data.

"We want a fair return for our intellectual property assets, one of our key assets," said Murphy.

According to a report in The Wall Street Journal on Friday, the probe also examines possible exclusionary effects of Intel's marketing tactics, specifically the subsidies the chip manufacturer gives PC vendors for including the "Intel Inside" logo or tune in advertising. Intel wouldn't confirm that and nobody at the EC was available for comment.

The investigation follows an antitrust probe of Intel launched by the US Fair Trade Commission that began in 1997 and ended in late September last year with no action taken. The FTC accused the chip maker of harming competition when it refused to do business with three companies -- Compaq, Intergraph and the former Digital Equipment (since acquired by Compaq) -- unless they agreed to license patented technology on Intel's terms. The case was settled in 1999 but the investigation continued until late September last year.

Martyn Williams in Tokyo contributed to this report.

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Joris Evers

PC World
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