Commission emboldened by Microsoft battle

Commission emboldened by Microsoft battle

The European Commission has turned its attention to alleged market abuse by other US technology companies now it has concluded its battle with Microsoft.

Its antitrust court victory two weeks ago has freed resources and emboldened it in its investigations of how US companies conduct their business in Europe.

However, it has yet to prove it can act quickly to correct markets, with investigations of indeterminate length being spread over numbers of years.

First in the firing line is the world’s biggest chipmaker, Intel.

The Silicon Valley company has until next Monday to respond to a “statement of objections” issued by the Commission in July.

It has been accused of abusing its dominant position in PC microprocessors – offering chips below cost and inducing computer makers not to buy from its rival, Advanced Micro Devices. Intel denies the allegation.

AMD first lodged a complaint against Intel in 2000, so it took seven years of inquiries by the Commission to produce the Statement of Objections. Intel executives say their legal team has been wading through a huge amount of documentation, suggesting the company may apply for an extension in the next few days.

Qualcomm's case has not reached the “objections” stage.

The company emphasised on Monday the antitrust complaints against it were being handled under a new policy.

The Commission initiates proceedings, without expressing a view on the merits of the complaints and without issuing a Statement of Objections.

This leaves open various courses of action including a rejection of the complaints, seeking a settlement with Qualcomm or issuing a Statement of Objections.

Analysts at UBS Securities said it would be unusual for the Commission to mandate royalty rates “particularly given separate agreements already negotiated with the various parties”.

Given the complexity and potential impact to the related parties, they said the outcome was difficult to predict and that a quick resolution would be a surprise.

If you enjoyed this post, make sure you subscribe to my regular Email Updates!