Korea fines Intel $25 million for antitrust violations

by Steven Schwankert

June 5, 2008 —

The Korea Fair Trade Commission has fined Intel 26 billion won (US$25.4 million)
for abusing its dominant position in the microprocessor market.

The Commission said Intel offered rebates to South Korean computer makers if
they agreed not to buy chips from Intel rival Advanced Micro Devices, a practice
it said was in violation of fair trade rules.

Intel said it disagreed with the ruling and indicated that it will appeal it
to the high court in Seoul. Bruce Sewell, Intel general counsel, said Intel
believes the Commission did not give full consideration to the evidence it presented.

"When we get to a court where we have a real judge looking at this, that
[will be] good for us, and we have a right to do that," Sewell said.

The Commission issued a summary of its findings Thursday. The full findings
are expected to be published in 30 to 60 days. Intel will then have 30 days
to review them, after which it can file an appeal to the high court in Seoul.

In
a statement (in Korean), the KFTC said Intel offered the rebates between
2002 and 2005 to PC makers including Samsung Electronics and Trigem Computer.
The ruling is similar to one issued by Japanese regulators in 2005. Intel is
also being investigated in Europe and the U.S. for similar practices.

KFTC officials first began looking
into Intel's business practices in 2005, continuing the investigation with
an "unscheduled visit" to Intel's South Korea offices in February
2006.

Last September the Commission issued its preliminary antitrust charges, known
as a "statement of objections." Intel denied any wrongdoing.

The KFTC has shown no reluctance in the past to take on big companies that
it believed engaged in anticompetitive practices, although the fines in Korea
have been relatively light compared to those levied against companies in other
countries. In 2005 the KFTC fined Microsoft $34 million and required it to sell
a version of Windows in Korea that did not bundle instant messaging or Windows
Media Player software, while the European Commission fined Microsoft hundreds
of millions of dollars in a similar action in 2004.

An AMD official welcomed Thursday's ruling. "It's not surprising to me
at all, given [Intel's] past behavior and the different things going on in different
countries," said Patrick Moorhead, AMD vice president of advanced marketing.

IDG News Service