EU Ready to Drop Intel Antitrust Investigation

The European Commission said it is set to drop its antitrust investigation of Intel Corp., the No. 1 computer chip maker, after failing to find evidence the company was abusing its dominant position.

The commission’s “preliminary assessment is expected to find that the complaints are unfounded,” said Amelia Torres, a spokeswoman for Competition Commissioner Mario Monti. An Intel spokeswoman in Germany declined to comment. In the U.S., Intel spokesman Tom Beermann didn’t return a call seeking comment.

The commission, the 15-nation European Union’s executive agency, opened the investigation in April after complaints the U.S. company was using loyalty programs and rebates to prevent customers from going to competitors. Intel’s main rivals are Advanced Micro Devices Inc. and Taiwan’s Via Technologies Inc.

“The case hasn’t got merit,” said Ashok Kumar, analyst at U.S. Bancorp Piper Jaffray, who has an “outperform” rating on Intel shares. “Intel is fairly cognizant of potential infractions and they steer clear of that.”

Intel could have faced a fine as high as 10% of sales if found guilty. That threat still hangs over Microsoft Corp., which the commission is investigating for allegedly abusing its dominance of operating system software.

“This is not like the Microsoft investigation,” Kumar said. “This is more of a sideshow.”

Santa Clara, Calif.-based Intel controls 84% of the European microprocessor market, which generated a quarter of the company’s $34 billion in sales in 2000.

The commission studied whether the way Intel licenses the design of the connections that link chips with other computer components discriminates against competitors, according to the New York Times, which reported earlier that the probe would be dropped.

Advanced Micro spokesman John Greenagel didn’t return calls seeking comment.

The ending of the probe comes as EU antitrust investigators approved Hewlett-Packard Co.’s proposed $23.8-billion purchase of Compaq Computer Corp.