Intel Corporation: European Union Antitrust Case

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Case Details:

Case Code : ECON030
Case Length : 25 Pages
Period : 2001-2009
Pub. Date : 2009
Teaching Note :Not Available
Organization : Intel Corporation
Industry : Computers, IT and ITeS
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction

The EC accused Intel of engaging in anti-competitive business practices in a bid to gain dominance in the microprocessors market by excluding competitors like Advanced Micro Devices (AMD).

It said that Intel had misused its dominant position in the market, "with the aim of excluding its main rival from the market."⁶ One of the major charges against Intel was that it offered partial or full rebates to Personal Computer (PC) manufacturers including Dell Inc.⁷ (Dell), Acer Inc.⁸, the Lenovo Group⁹, Hewlett-Packard Company¹⁰, etc. on the condition that they committed themselves to buying all the x86¹¹ microprocessors from Intel.

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The company also allegedly made payments to a German retailer, Media-Saturn Holding¹² (Media-Saturn), on the condition that it stocked only PCs equipped with Intel's x86 microprocessors. The EC said that this practice had prevented customers from choosing alternative products...

Excerpts >>

6] Stephen Labaton, "In Turnabout, Antitrust Unit Looks at Intel," www.nytimes.com, June 7, 2008.
7] Dell Inc., headquartered in Round Rock, Texas, USA, is one of the largest PC makers in the world. Its revenue in 2008 was US$ 61.133 billion.
8] Acer Inc. is headquartered in Taipei, Taiwan. It had revenues of US$ 16.65 billion in 2008. In addition to PCs, its product portfolio also includes personal digital assistants (PDAs), servers and storage, displays, peripherals, and e-business solutions for business, government, education, and home users.
9] The Lenovo Group Limited is headquartered in Beijing, China. Its revenue for 2008 was US$ 16.4 billion. In addition to PCs its product portfolio includes PDAs, servers, imaging equipment, and mobile phone handsets.
10] Hewlett-Packard Company, headquartered in Palo Alto, California, USA, is one of the leading manufacturers of PCs, printers, network management software, servers, etc. For the fiscal year 2008, its revenue was US$118.364 billion.
11] x86 is a family of microprocessor designed by Intel. The first microprocessor released by Intel belonging to the x86 family was Intel's 8086 microprocessor.
12] Headquartered in Germany, Media-Saturn Holding is a consumer electronics retailer that manages two independent retail brands - Media Markt and Saturn. In 2008, the company recorded sales of € 19 billion (Source: www.media-saturn.com).

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