Intel faces charges by EU

The European Commission issued formal charges Thursday against Intel Corp., alleging that it used illegal tactics against smaller rival Advanced Micro Devices Inc., a European Commission spokesman said.

The commission, the European Union’s top antitrust regulator, has spent years investigating Intel to determine whether it acted unfairly to preserve its dominance over AMD.

“I can confirm the statement of objections has been sent,” said Ton Van Lierop, a spokesman for the European Commission. Intel had no immediate comment.

The two companies make all the central processing unit chips at the heart of the world’s 1 billion personal computers and servers.

AMD has sued Intel in the U.S., South America and other jurisdictions, but no judgments have been made by courts.

On July 19, AMD posted a 13% rise in second-quarter revenue but reported a $600-million loss.

AMD gained market share against Intel in 2005 and most of 2006 but suffered a downturn later last year when Intel rolled out powerful new processors and cut prices on older models.

AMD’s market share at the end of 2006 was 25% of unit shipments for the x86 processors that act as the brains for almost all personal computers.

But by the end of March 2007, AMD had slipped to less than 19%, according to Mercury Research.

Intel has had some past government challenges. It settled charges with the Federal Trade Commission in 1999, and the agency dropped an additional investigation of the firm’s marketing practices in 2000.

Intel shares fell 50 cents to $24, while AMD lost 85 cents to $14.73.