Intel Faces European Antitrust Charges

Updated from 1:10 p.m. EDT

Intel(INTC) suffered a legal blow late Thursday after European regulators brought formal antitrust charges against the chipmaker.

The European Commission filed a statement of objections concerning Intel's business practices, contending that the company has abused its dominant position in the microprocessor market, with the intent of excluding rival Advanced Micro Devices(AMD).

"In the short, medium and long term we think the actions of Intel are bad news for competition and consumers," said EC spokesperson Ton Van Lierop at a press briefing.

The EC's statement of objections alleges that Intel paid a computer maker to cancel or delay the launch of a product line featuring an AMD microprocessor.

The commission also said Intel has provided rebates to computer makers, conditional on them obtaining all or the great majority of their microprocessors from Intel, and that Intel has cut its server-chip prices below costs to certain customers in order to outbid AMD.

Intel is the world's No.1 chipmaker, and it controls about 75% to 80% of the PC microprocessor market, depending on the quarter.

Intel issued a statement Friday asserting that the company believes the microprocessor market is functioning normally and that its conduct has been lawful.

"While we would certainly have preferred to avoid the cost and inconvenience of establishing that our competitive conduct in Europe has been lawful, the Commission's decision to issue a Statement of Objections means that at last Intel will have the opportunity to hear and respond to the allegations made by our primary competitor."