European Ombudsman says EU mishandled Intel case

The European Commission was guilty of maladministration in its record-busting anti-trust action against Intel, the European ombudsman said yesterday.

EU antitrust regulators fined Intel a record €1.06 billion in May, claiming the chip maker abused its stranglehold on the semiconductor market to crush its main rival.

However, the ombudsman announced that he had "found maladministration" in that the commission failed to make a proper note of a key meeting with computer manufacturer Dell in 2006 relating to the Intel investigation.

"I hope that my decision in this case will help the commission to improve its administrative procedures by ensuring that its future anti-trust investigations are fully documented," ombudsman P. Nikiforos Diamandouros said in a statement.

The ombudsman said he was unable to reach a decision on a more serious charge that the commission encouraged Dell to enter into an information exchange agreement with micro-chip producer AMD.

"It is clear that the question came up, (in a separate phone call) but because there was not proper record-taking it was impossible to decide whether the suggestion had come from Dell, which would have been quite within its rights to do so, or the commission," an ombudsman spokesman said.

Intel welcomed the ombudsman's opinion, which is not binding but is normally followed by European courts.

"The Ombudsman's decision speaks for itself. Intel has consistently said that the (EU) directorate general of competition ignored evidence that was potentially exculpatory for Intel and that it was selective in its use of other evidence," the company said in a statement.

The company has lodge a court appeal against the fine.

For its part the commission, which oversees EU competition rules, said it took note of the ombudsman decision "and welcomes the fact that the ombudsman has not found that the commission committed any maladministration as regards an exchange of information between two companies involved in the Intel case."

It also noted that while the ombudsman criticised its record-keeping, he did not conclude that Intel's rights of defence had been infringed or the outcome of the procedure affected.