Intel Statements on the European Commission Decision

I want to share with you the views of our CEO and General Counsel on the European Commisson’s decision today.

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EC Ruling: Statement by Intel President and CEO Paul Otellini

 SANTA CLARA, Calif., May 13, 2009 – Paul Otellini, Intel Corporation president and CEO today issued the following statement regarding the European Commission decision on Intel’s business practices:

“Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal.”

“We do not believe our practices violated European law. The natural result of a competitive market with only two major suppliers is that when one company wins sales, the other does not. The Directorate General for Competition of the Commission ignored or refused to obtain significant evidence that contradicts the assertions in this decision. We believe this evidence shows that when companies perform well the market rewards them, when they don’t perform the market acts accordingly.”

“Intel never sells products below cost. We have however, consistently invested in innovation, in manufacturing and in developing leadership technology. The result is that we can discount our products to compete in a highly competitive marketplace, passing along to consumers everywhere the efficiencies of being the world’s leading volume manufacturer of microprocessors.”

“Despite our strongly held views, as we go through the appeals process we plan to work with the Commission to ensure we’re in compliance with their decision. Finally, there should be no doubt whatsoever that Intel will continue to invest in the products and technologies that provide Europe and the rest of the world the industry’s best performing processors at lower prices.”

More information about Intel and “Competition in the Innovation Economy” is available at www.intel.com/pressroom/legal.

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Statement by Intel General Counsel Bruce Sewell
In response to European Commission Ruling
on Intel’s Business Practices
May 13, 2009

Thank you all for attending.

I would like to read a short prepared statement and then I will take your questions.   
A few moments ago Intel was informed of the Commission’s Final Decision and Order in a matter instigated by Intel’s largest competitor almost 10 years ago.  The predicate for this investigation in 2001 was that Intel’s conduct would result in the demise of that competitor if not regulated.  8 years later, our competitor, and the sole complainant in this case is alive, healthy, and claims to be expanding its business.  Moreover, in real terms, the cost of the products over which Intel is claimed to exercise monopoly power has fallen faster than that of any other of the 1,200 products tracked by the US government.

Against this backdrop, the Competition Authority today determined that Intel has violated the EC’s antitrust laws, and ordered Intel to modify certain alleged sales and pricing practices.  We take great exception to the conclusions reflected in this Final Decision and we are dismayed that in a time of such acute economic turmoil the Competition Authorities have seen fit to intervene in what is by all objective measures an innovative, dynamic and competitive market.

 The basic allegation against Intel is that it used lower prices, in the form of rebates, to prevent customers from buying or supporting AMD, or to punish customers when they did so.  Such claims are false.  Intel has never required a customer to agree not to buy from AMD in order to obtain a discount, nor raised a customer’s prices when it decided to buy from AMD.

Like every company Intel competes to win as much business as it can, and every time Intel wins a sale, or secures preferential marketing terms, one of our competitors loses out on that sale or marketing relationship.  This is the essence of true competition.  Intel provides incentives for customers to purchase our products and for customers to promote our products — incentives which can and have been matched by AMD at various times in the past.

Intel believes that consumers benefit from lower prices.  Regulations should not prevent one company, no matter how large that company is, from offering discounts or providing incentives.  Today, the part that Intel might sell to computer maker for €10, provides the same computing power that in 2000, when this case began, would have cost more than €1000.  Furthermore, innovation abounds – today’s computing is an on-the-go experience with ubiquitous Internet connectivity, 21st century graphics, extended battery life; all at a much lower price.  Intel believes this is good for consumers.

With respect to the fine imposed by the Competition Authority I will only say that the amount is arbitrary.  It bears no relationship to any actual or proven harm or injury.  But, so be it.  Intel’s response will be as it has always been.  We will respect the proper administration of justice within the EC.  We will comply with all appropriate measures to secure an undertaking in the amount of the fine, and we will defend ourselves vigorously by appealing this matter to the Court of First Instance.

Thank you and now I would be glad to answer a few questions.  However, I should mention at the outset that we have only been provided with a summary of the final decision, and that we have only had that for a little less than an hour.  We have been told that the final decision itself is dense.  We will be working through it as soon as we are given a copy, but we will likely need a little while longer to fully understand the basis, or lack thereof, for any particular finding or order.

 

 

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