South Korea – Last week, Intel found itself looking down the barrel of a new gun as accusations from the Korean Fair Trade Commission (KFTC) claiming that Intel did engage in illegal, monopolistic practices in Korea were filed. Details of the allegations remain secret and they are not court rulings. They are a Statement of Objection and the process involved carries with it a review phase which allows Intel to respond to these allegations.
In February, 2006, Intel’s offices in Korea were raided by authorities. As part of a prior investigation of unknown length, the state moved forward to collect information to build a case against Intel. They were hoping to address allegations of Intel’s illegal business practices in Korea. And today, over 18 months later, the KFTC has issued a Statement of Objection to which Intel must now respond.
This Statement of Objection is very similar to the one issued by the European Comission in July, 2007. While it is not a court ruling, it is one which accuses Intel of wrong doing. Intel must now respond and determine how best to proceed.
Chuck Mulloy, Corporate Spokesman for Legal Affairs at Intel, said “Intel is hopeful that it will be able to show to the Commission’s satisfaction that the microprocessor market is functioning normally and that its conduct has been pro-competitive and beneficial to consumers.” He also told us this statement is issued in Korea and will not impact operations anywhere else in the world.
Mulloy also told us Intel is now going through a review process on the statement. Following that, they’ll begin preparing a formal response and will determine whether or not they’ll need a hearing. They’ll also find out what type of sanctions may be imposed which could affect their operations in Korea.
Mulloy stated it is uncertain if they will go to court if an adverse ruling is found by the KFTC. He said they’d have to consider everything carefully and weigh all of their options. Previously, similar response proceedings like these with Microsoft took up to a year, according to Mulloy. Mulloy was not able to give a firm time frame for Intel’s response.
Intel is prohibited from discussing details of the case due to Korean law and ongoing investigations. However, Mulloy did tell us the KFTC has issued a follow-up statement following yesterday’s release. It was issued to dispell rumors and myths which quickly began circulating by serveral Korean news outlets, including Bloomberg. It reads as follows:
“The statement released in the name of Director General of the Headquarters for Competition Law Enforcement states, “Whether Intel violated the Korean Fair Trade and Monopoly Regulation Act and whether there would be any sactions on Intel have never been decided but are to be reviewed and decided by the full Commission. Also, any specific time schedule for the hearing for the Intel case has not been determined.”
AMD has reportedly stated they were contacted by Korean authorities and not the other way around. Intel has stated their competitor (AMD) has gone to several countries repeating the same claim over and over. Former anti-trust lawyers have said that with Intel’s large market share alone it is not even surprising they are being looked at very hard.
This new, independent charge by the KFTC adds fuel to the “is Intel guilty” fire. Intel now finds it has two Statements of Objection filed against it. And with Intel facing anti-trust investigations on several continents, the possibility that these two statements could weigh on people’s minds is not outside the realm of possibility.
During the Q&A session following AMD’s recent Technology Analyst Day 2007, AMD’s CEO Hector Ruiz was specifically asked about the ongoing anti-trust case and AMD’s chances of winning it. He responded by saying “we believe we will win [that case] hands down.”