Intel faces the music in Japan

Intel said it will immediately change the way it does business in Japan as part of its punishment for alleged anticompetitive behaviour. Last month month, Japan's Fair Trade Commission (JFTC) found Intel had engaged in market activities to keep the competition out. Intel was accused of giving rebates and tapping into other finances like its "Intel Inside" marketing fund to influence Japanese computer to use only Intel's chips. The JFTC said the manoeuvres were also designed as a deterrent from doing business with Intel's competitors like AMD. The restrictions as a significant setback to Intel considering the company's total sales in Japan last year reached $34.2 billion, or about 9 percent of its business overall. To circumvent some of the pain points of a Japanese probe, Intel said it will agree to the JFTC's cease and desist provisions, even if it does not agree with their conclusions. "Intel respectfully disagrees with the allegations contained in the recommendation, but in order to continue to focus on the needs of customers and consumers, and continue to provide them with the best products and service, we have decided to accept the recommendation," Bruce Sewell, vice president and general counsel for Intel, said in a statement. Intel had ten days to either comply with or appeal the ruling, but requested a two-week deadline extension. Now that Intel has elected to accept the recommendation the company will need to alter business practices. It will also have to notify its customers that any such practices have come to an end. "We believe the recommendation's cease and desist provisions define a workable framework that enables us to continue to provide competitive pricing to our customers, and benefits consumers and the Japanese economy," Sewell said. Carol Barrett, a director of enterprise platforms at Intel, told earlier this week that accusations claiming Intel was trying to lock in OEMs is just absurd. "When you are working with multiple sides on a project, you need a consistent foundation that does sometimes have restrictions upon it," Barrett said. "We do not tell these companies that you can only sell one type of product. There are limits to what we can do from a marketing perspective because there are different capabilities from U.S. to China to Europe. So having a multi-platform like that addresses that support." Intel's chip-making rival AMD was not as discreet in its assessment of Intel's actions. "It is unfortunate that even when presented with specific -- and very disturbing -- findings of deliberate and systematic anti-competitive behaviour, Intel refuses to face the facts and admit the harm it has caused to competitors and consumers," said Tom McCoy, AMD executive vice president, legal affairs and chief administrative officer. The charges came after JFTC officials raided three Intel offices in Tokyo last April. As part of its investigation, the JFTC found that some manufacturers were required to buy 100 percent of their CPUs from Intel, while another manufacturer was forced to cut back its non-Intel purchases to 10 percent or less. The recommendation also revealed that Intel imposed these restrictions in direct response to AMD's market share in Japan between 2000 and 2002. The recommendation also notes that as a result of this misconduct, the combined Japanese market share of AMD and a second, much smaller CPU company fell from 24 percent in 2002 to 11 percent in 2003. Intel is also facing scrutiny from the European Commission over its market practices, namely that the company had strong-armed PC makers into deals. Intel said it is cooperating with the Japanese and European authorities. UKFast is not responsible for the content of external Internet sites.

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