Intel charged in South Korea with violating antitrust laws

Intel Corp., the world's largest semiconductor company, has been charged with violating South Korean antitrust laws, the company and regulators said Tuesday.

It's the latest legal setback for Intel, which is being scrutinized by antitrust regulators in several countries over allegations it abused its market dominance to pressure computer makers and undermine rivals, particularly Advanced Micro Devices Inc.

The Korean Fair Trade Commission said it has completed a two-year probe into Intel's activities in the country, but officials declined to elaborate on the findings. The regulators are now deliberating about possible penalties against Intel, which commands more than three-quarters of the worldwide market for microprocessors, the electronic brains of computers.

Chuck Mulloy, a spokesman for Intel in Santa Clara, Calif., confirmed that the company received a "statement of objection" last week from the commission, which is a preliminary set of charges.

Mulloy said he could not discuss allegations against the company or divulge the contents of the statement because the document is confidential.

Intel has the right to respond to the findings, request a hearing and, if it remains unsatisfied, take the issue to court in South Korea, he said.

"We're hopeful that we'll be able to show the commission that the microprocessor market is functioning normally and that this is an extremely competitive market and that our conduct has been pro-competition and beneficial to consumers," Mulloy said.

South Korea's Yonhap news agency, citing sources it did not identify, reported Tuesday that the regulator was expected to reach a decision on a penalty by October.

Neither commission official Nah Young-kyu nor Intel's Mulloy would comment on the timing or potential penalties.

Intel has faced numerous legal battles over how it maintains its market position. The company has repeatedly denied breaking any laws.

In July, the European Union charged Intel with monopoly abuse, saying Intel unfairly harmed AMD's business by doling out big rebates to computer makers who agreed to buy most of their microprocessors from Intel, and by selling its own chips below cost to strategic customers.

Many of the European claims also appear in a landmark antitrust lawsuit that AMD filed against Intel in 2005 and is now in the document-swapping legal process known as discovery. The lawsuit, which claims Intel illegally forced key customers into exclusive deals to stunt AMD's growth, is scheduled to go to trial in 2009 in Delaware federal court.

Intel shares rose 31 cents, 1.2 percent, to close at $25.66 Tuesday.

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Associated Press Writers Sangwon Yoon in Seoul and Jordan Robertson in San Jose, Calif., contributed to this report.