S. Korea to hit Intel with $25.4M antitrust fine
South Korea's antitrust regulator said Thursday it will order Intel Corp. to pay 26 billion won ($25.4 million) for violating fair trade rules, the AP reported.
The Korea Fair Trade Commission said in a statement it was issuing the order because the semiconductor giant offered rebates to South Korean computer companies to undercut competitor Advanced Micro Devices Inc.
Intel immediately criticized the ruling and said it would consider its options, including a possible appeal.
"We're disappointed and we completely disagree with the findings," Bruce Sewell, Intel senior vice president and general counsel, said in Seoul.
The KFTC last year charged Intel with violating South Korean antitrust laws after completing a two-year probe.
The commission said that Intel provided rebates to Samsung Electronics Co. and Trigem Computer Inc. to not use central processing units, or CPUs, manufactured by AMD, Intel's main competitor.
Samsung spokeswoman Lee Soo-jeong said the company had no comment.
Trigem spokesman Bang Yeong-il said that rebates were used legally for joint marketing.
Intel has been scrutinized by regulators in several countries and the European Union over allegations it abused its market dominance to pressure computer makers and undermine rivals.
Intel dominates the world market for microprocessors, the electronic brains of computers.
The company, based in Santa Clara, Calif., has faced numerous legal battles over how it maintains its market position.
One of Intel's biggest legal headaches is a landmark antitrust lawsuit AMD filed in June 2005 in U.S. District Court for the District of Delaware - and is still pending - accusing its much-larger rival of illegally maintaining and protecting a monopoly in microprocessors by threatening computer makers and forcing them into exclusive deals.
A victory by Sunnyvale, Calif.-based AMD could mean potentially billions of dollars in damages. Trial is scheduled for 2009. The lawsuit is currently in the document-swapping phase of the legal process called "discovery."
Intel has also been hit with antitrust charges in the European Union, where regulators have accused the company of paying manufacturers to delay or cancel product lines using AMD chips while selling its own chips below their average cost, which the EU views as predatory pricing.
Intel has repeatedly denied breaking any laws.
Intel's Sewell said that the company would wait for the issuance of an official outcome from the KFTC on the South Korean case, which could take between 30 and 60 days, before deciding a course of action.
Details of the ruling could change during that period.
He said Intel has the option to request a reconsideration to the commission, though could also seek a court ruling.
The commission ordered Intel to stop using rebates to encourage South Korean companies not to use the CPUs of AMD and thereby maintain its market share.
"To ask us to cease and desist behavior which we are not doing and never have done is odd," said Intel spokesman Nick Jacobs. "We don't use rebates in an anticompetitive fashion."