EU Conducts Antitrust Raid on Intel, Retailers

SAN FRANCICSO (Reuters) – The European Commission conducted antitrust raidsagainst Intel Corp’s Munich offices on Tuesday and against retailers sellingproducts of the world’s largest chip maker, the Commission and the chip makersaid.

The European Union watchdog’s actions ratcheted up pressure on Intel andbroke new ground by raiding Germany’s huge Media Markt-Saturn and Britishelectrical goods retailer DSG International Plc, which owns Dixons andCurrys.

Intel has been preparing for a Brussels hearing on March 11 and 12 to answerpending charges it abused its dominance of the market for central processingunits (CPUs) at the heart of every PC.

"Commission officials carried out unannounced inspections at the premises ofa manufacturer of central processing units and a number of personal computerretailers," said Jonathan Todd, a Commission spokesman.

He said the Commission, accompanied by local law enforcement staff, conductedthe raids because it had reason to believe the companies "may have violated EC(European Community) Treaty rules on restrictive business practices and/or abuseof a dominant market position."

Intel confirmed the raids.

"There has been a raid on our offices in Munich. As is our normal practice,we are cooperating with authorities," said Chuck Mulloy, a spokesman for thechip maker .

In London, British retailer DSG said it was part of the sweep aswell.

"I can confirm that officials from the EU Commission are currently conductingan inspection at our Retail Support Centre in Hemel Hempstead," a DSG spokesmansaid in a statement.

Germany’s Media Markt-Saturn also confirmed it was raided. It is a subsidiaryof trading company Metro, which controls most of that country’s retailelectronics market and operates in other countries as well.

The raids come as Intel faces a closed hearing in Brussels next month oncharges that it slashed prices below cost and offered huge rebates in an attemptto drive smaller competitor Advanced Micro Devices Inc out of themarket.

The Commission was already investigating Media Markt-Saturn for its ties toIntel, acting on a reference from the German anti-cartel agency. The retailersells PCs with Intel CPUs but not those by AMD.

The Commission is the EU’s antitrust watchdog and has powers to finecompanies up to 10 percent of their global annual revenue for competitionabuses.

(Additional reporting by Jens Hack in Munich and Dan Lalor in London; Editingby David Holmes, Paul Bolding)

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