Filed under: Law, Competitive strategy, Microsoft (MSFT), Intel (INTC), Advanced Micro Dev (AMD)
Intel (NASDAQ: INTC) is finally making its case to European Union authorities, saying its practices in the region were not anti-competitive. It may be a hard sell.
The extent to which Intel has beaten rival AMD (NYSE: AMD) does not look good on paper. Intel has nearly 80% of the global chip market for PCs and servers. According to The Wall Street Journal: “The EU filed preliminary charges against Intel in July, alleging the company offered rebates to customers only if they didn’t use AMD products; paid customers to delay the launch of AMD-based products; and sold its chips below cost to undercut AMD.”
If Intel loses the case, it could face major fines and sanctions just as Microsoft (NASDAQ: MSFT) did recently when the EU ruled that its activity violated anti-trust laws.
There may be more riding on the outcome of the hearing for AMD than for Intel. The larger company can afford fines and probably live with some restrictions in the region. AMD may need chain on Intel to turn itself around. The company has over $5 billion in debt and recently took a huge write-off for the falling value of its purchase of graphic chip company ATI. The company’s shares are down from over $36 less than two years ago to just above $6.
AMD may not be able to compete in an open marketplace. The courts may be its only refuge.
Douglas A. McIntyre is an editor at 247wallst.com.
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