EU says widens Intel probe, adds Media Markt

BRUSSELS, Sept 11 (Reuters) The European Commission is widening an antitrust review of Intel to see whether it pressured an electronics retailer to exclude rival Advanced Micro Devices, a spokesman for the EU executive said.

The relationship between chip maker Intel and German company Metro AG's Media Markt had been under investigation by that country's Bundeskartellamt competition agency following a complaint by AMD, but the Commission is taking over the case.

''We have liaised with the Bundeskartellamt and come to a common understanding that it would make more sense if these charges could be dealt with by the European Commission,'' spokesman Jonathan Todd said on Monday.

Todd said the transfer was made ''bearing in mind that (the suspected actions) seem to belong to a set of practices that is already under scrutiny by the Commission'', that is, ''a range of tactics used by Intel to limit the market share of AMD''.

The German agency also confirmed that the case was being transferred, saying it wanted to avoid duplication.

Intel spokesman Chuck Mulloy said: ''We believe our activities are lawful, and we have been cooperating with the German authorities and we have been cooperating with the staff at the Commission and will continue to do so.'' The European Union's executive arm was already looking at whether Intel pressured computer makers to prevent AMD from gaining market share.

Electronics chain Media Markt has stores in many European countries and the Commission received complaints about the retailer's conduct in several of those states, sources familiar with the situation said.

The Financial Times Deutschland reported in July that it had seen documents furnished to the Bundeskartellamt that showed Intel paid Metro millions of euros to exclude AMD. AMD complained to the German agency.

Bundeskartellamt President Ulf Boege said at a joint appearance with EU Competition Commissioner Neelie Kroes in July the complaint would be turned over to Brussels if the agency found it had substance.

Intel and AMD are the sole makers of the central processing unit chips at the heart of the more than 500 million Windows PCs worldwide. Intel holds roughly 80 percent of the market.

AMD has complained to the Commission that Intel used anti-competitive tactics to prevent it from moving much beyond a 20 percent market share by value.

Still, Intel announced this month that it would cut 10,500 jobs, about 10 percent of its workforce, in the face of increasing competition from AMD.

REUTERS DKS HS2003