E.U. Releases E-Mails to Defend Decision on Intel

European antitrust regulators on Monday published a torrent of internal e-mails and other company documents to back up its record fine against Intel, arguing that they showed computer manufacturers were afraid to cross the chip-making giant.

Neelie Kroes, the European Union competition commissioner, imposed the €1.06 billion fine in May for abusing its dominance in the computer chip market to exclude its only serious rival, Advanced Micro Devices. Since then Intel has appealed against the decision to a European court, accusing her investigators of botching procedures and trampling on the company’s rights of defense.

In an unusual move, Ms. Kroes shot back on Monday with extracts from e-mails and other documents obtained during the investigation, which she said showed how Intel used unfair tactics to pressure companies to exclude A.M.D. chips from personal computers sold in Europe.

In one internal presentation from 2003, Dell, a computer maker, noted that switching any part of its supplies to A.M.D. from Dell risked retaliation by Intel that “could be severe and prolonged with impact to all LOBs,” or lines of business.

Another computer maker, HP, submitted an e-mail to the commission showing an HP executive pleading with other members of the company to keep quiet about an apparently restrictive agreement with Intel.

“PLEASE DO NOT...¦ communicate to the regions, your team members or AMD that we are constrained to 5% AMD by pursuing the Intel agreement,” the email, from 2002, said.

In another e-mail extract, an HP executive warned his colleagues not to jeopardize payments made to HP by Intel by selling AMD-based business desktop computers though certain distributors.

“You can NOT use the commercial AMD line in the channel in any country, it must be done direct,” the e-mail, from 2004, said. “If you do and we get caught (and we will) the Intel moneys (each month) is gone (they would terminate the deal). The risk is too high.”

On Monday, Intel accused the Ms. Kroes’s office at the European Commission of engaging in unfair tactics itself.

“The Commission relied heavily on speculation found in e-mails from lower level employees that did not participate in the negotiation of the relevant agreements, if they favored the commission’s case,” Robert Manetta, an Intel spokesman in London, said.

Investigators also “ignored or minimized hard evidence of what actually happened, including highly authoritative documents, written declarations and testimony given under oath by senior individuals who negotiated the transactions at issue,” he said.

Mr. Manetta said Intel planned to present documentation at its appeal at the European Court of First Instance in Luxembourg.

An official record of the appeal, published Sept. 9 in an E.U. official journal, showed that Intel has accused the commission of ignoring documents that “were potentially exculpatory of Intel” and of failing to “make a proper note of its meeting with a key witness from one of Intel’s customers, who was highly likely to have given exculpatory evidence.”

The commission insisted again on Monday that its investigation had been sound.

“During the proceedings Intel was able to comment fully on all the Commission’s evidence outlined in the decision,” it said in a statement accompanying the published emails and documents. “Indeed, the commission went beyond its legal obligations in safeguarding Intel’s rights of defense,” it said.

The appeal is not expected to be heard before next year at the earliest.

(Published by New York Times - September 21, 2009)