South Korea Fines Intel for Unfair Practices

June 5, 2008
Fine is $25 million for abusing market position

South Korea's anti-trust watchdog on June 5 fined Intel, the world's biggest semiconductor maker, $25 million for abusing its dominant market position after a long-running investigation. Intel was guilty of unfair practices, the Fair Trade Commission said accusing it of offering rebates to local clients and pressuring them not to buy rival chips. The anti-trust probe began in June 2005 after rivals accused Intel of using its commercial muscle in dealings with local computer manufacturers.

"We have taken an appropriate action based on our findings that Intel has abused its market dominant position against its weaker rival," commission chief Baek Yong-Ho said. "This action is intended to promote competition in the market at the benefit of consumers."

Intel said it would consider requesting a further review or an appeal after examining the South Korean commission's decision in detail. "We are disappointed with the decision. We feel the commission has overlooked or ignored key evidence that demonstrates Intel's business practices have been fair and lawful," Intel's Asia Pacific regional spokesman Nick Jacobs said.

A commission official earlier said that Intel had "abused its dominant market position" for local clients to use its chips, adding that the watchdog would send official documents to Intel. The commission said Intel's rebate had helped the company secure an average local market share of 91.3% between 2001 and 2005.

Samsung Electronics received around $2.6 million in rebates from Intel every quarter from the fourth quarter of 2002 to the second quarter of 2005, it said.

Intel's central processing units provide the computing power for 80% of the world's personal computers. The company has been hit by anti-trust cases in the U.S., Japan and Europe. U.S .rival Advanced Micro Devices has sued Intel for using improper subsidies.

Intel is also facing a decision by Europe's competition watchdog, which has accused the firm of making payments to clients to delay or cancel products using rival chips.

Copyright Agence France-Presse, 2008

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