European Commission raids retailers in Intel probe

The European Commission stepped up its investigation into possible anti-competitive behaviour by the world's largest chipmaker, Intel, by raiding not just the company's Munich offices on Tuesday but retailers selling its products

The European Union watchdog broke new ground by raiding Germany's huge Media Markt-Saturn, British electrical goods retailer DSG International Plc, which owns Dixons and Currys, and France's PPR, owner of retailer Fnac. Carrefour, another prominent French retailer, declined to say if it had been raided.

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

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

He said the Commission, accompanied by local law enforcement staff, conducted the raids because it had reason to believe the companies "may have violated EC [European Community] Treaty rules on restrictive business practices and/or abuse of 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 the chip maker .

Intel faces a closed hearing in Brussels next month on charges that it slashed prices below cost and offered huge rebates in an attempt to drive smaller competitor Advanced Micro Devices out of the market. The pending charges concern Intel's actions regarding AMD and computer manufacturers. The new raids are instead looking at Intel's actions in relation to retailers.

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

"I can confirm that officials from the EU Commission are currently conducting an inspection at our retail support centre in Hemel Hempstead," a DSG spokesman said in a statement.

Germany's Media Markt-Saturn also confirmed it was raided. It is a subsidiary of trading company Metro, which controls most of Germany's retail electronics market and operates in other countries as well. In Paris, France's PPR also acknowledged its offices were raided.

The Commission "is carrying out an inspection at the moment at the offices of PPR Purchasing&", said a PPR spokeswoman. The spokeswoman said that the raid focused on the Intel products it sells. In addition to Fnac, PPR owns small computer specialist Surcouf and furniture retailer Conforama, which also sells electronics goods.

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

The Commission is the EU's antitrust watchdog and has powers to fine companies up to 10 per cent of their global annual revenue for competition abuses.

Image: DSG International, owner of retail chain Currys, was among the companies raided by EU antitrust investigators

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