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 user 2005-03-11 at 10:10:00 am Views: 109
  • #10802

    Japan’s corporate watchdog censures Intel
    Regulators tell U.S. chip giant to stop curbing


    TOKYO – Japan’s
    anti-monopoly watchdog issued a warning to U.S. chipmaker Intel Corp. on
    Tuesday, demanding that the company stop curbing competition in the
    microprocessor chip market by pressuring Japanese clients to buy its

    Japan’s Fair Trade
    Commission didn’t impose any fines on Intel, but said the U.S. company could
    face prosecution if it doesn’t change its ways. Intel was given 10 days to

    The FTC said the
    semiconductor maker broke antitrust laws as early as 2002 by trying to stifle
    rivals in central processing units, or CPUs — the microprocessor chips that
    comprise the silicon brain of all computers.

    “Intel is engaging
    in actions to keep CPUs made by competing companies from being used,” the FTC
    said in a statement. “These actions … are substantially limiting the CPU sales
    sector for domestic personal computer makers.”

    It ordered the
    company to conduct periodic inspections and hold training sessions to put an end
    to the practice.

    The decision
    follows a raid in April 2004 by the FTC of Intel’s three Japanese offices on
    suspicions the company was improperly urging Japanese personal computer makers
    not to use microprocessor chips manufactured by its U.S. rivals, including
    Advanced Micro Devices Inc. and Transmeta Corp.

    Lower prices,
    money offered
    The FTC said Intel had offered lower prices and marketing
    money to Japanese PC makers Hitachi Ltd., Sony Corp., Fujitsu Ltd., Toshiba
    Corp. and NEC Corp., which use Intel chips and brand their products with “Intel
    Inside” and “Centrino” labels. Centrino is Intel’s wireless networking

    Intel made the
    deals on condition that the PC makers either exclusively use Intel chips or
    limit the use of rivals’ chips to 10 percent, the FTC said.

    Intel’s share of
    the CPU market in Japan rose to 90 percent in 2004, from 78 percent in 2002,
    according to estimates by market research firm IDC. Advanced Micro Devices’
    share fell to 8 percent, from 18 percent, over the same period.

    Intel defended its
    practices after the ruling. “Intel continues to believe its business practices
    are both fair and lawful,” Intel said in a statement.

    regulators should only intervene where there is evidence of harm to consumers,”
    and the FTC did not sufficiently weigh such principles, the statement quoted
    Intel vice president and general counsel Bruce Sewell as saying.

    The company was
    deciding its next steps, the statement said.

    proceedings possible
    If Intel rejects the FTC’s recommendations to drop
    its practices, the watchdog has the authority to launch legal proceedings
    against it. It was not immediately clear what punishment it may face if the
    matter goes to court. It’s unclear what potential consequences Intel could

    If Intel decides to
    appeal the FTC’s ruling, it could be months to years before any action is taken.
    The FTC’s case against Microsoft Corp., which the commission accused of unfair
    licensing arrangements with Japanese manufacturers, has been held up in
    government hearings to assess the U.S. software maker’s appeal.

    Santa Clara,
    California-based Intel also has faced similar probes by antitrust regulators
    into its business practices in other parts of the world, including in the United
    States and Europe.

    On Tuesday, a
    European Union spokesman said regulators in Brussels were continuing their own
    investigation into Intel.