The closed oral hearing on Tuesday and Wednesday comes after the commission in July last year said it suspects the group, amongst other charges, of offering rebates to computer makers in an attempt to drive rival Sunnyvale, California, US-based Advanced Micro Devices Inc (AMD) out of the 30 bln usd microprocessor market.
The commission's hearing officer will report findings from the hearing to the EU's competition services, headed by competition commissioner Neelie Kroes, to make a ruling at a later date.
On Feb 21, BEUC, the European Consumers' Organisation, applied to the commission to become an interested outside party in the case. The organisation said: "The alleged practices, if confirmed, would have a detrimental effect on the variety of products offered to consumers, and, consequently, on the prices consumers have to pay for their personal computers."
"As the role of computing increases in consumers' everyday life, this matter is of crucial importance".
"The promotion of consumer choice and of competitive price levels is a fundamental element of the Commission's case against Intel as of the EU competition policy in general; it is therefore important that the consumer voice is heard in this debate".
In July last year, six years after the inquiry opened, the commission sent charges to Intel for alleged abuse of its market dominance over AMD in the computer processing units (CPU) sector.
The EU executive said then that it believes Intel provided "substantial rebates" to various original equipment manufacturers (OEM) on the condition that they obtain all, or the great majority, of their CPU requirements from Intel.
The commission also claimed Intel made payments to induce an OEM to either delay or cancel the launch of a product line incorporating an AMD-based CPU. In addition, the commission believes Intel strategically offered CPUs at below-average cost to customers such as governments and educational institutions.
Santa Clara, California, US-based Intel has denied all the charges and said its practices are fair.
The group, which commands three-quarters of the worldwide microprocessor market -- the brains of personal computers --, has denied AMD's allegations and defends its business practices as legal and beneficial to consumers.
Bruce Sewell, Intel senior vice president and general counsel, has said previously that "the evidence that this industry is fiercely competitive and working is compelling".
If the charges are confirmed, the commission could impose a fine up to 10 pct of Intel's global annual sales.
In mid-February, and in a move that could expand its original case, the commission raided Intel's offices in Munich and, focusing on the final link of the supply chain, unnamed computer retailers in Europe.
Part of AMD claims allege that Intel's sales tactics unfairly shut out any rivals.
Europe's largest retailer of consumer electronics Germany's Metro AG-owned Media Markt, UK electrical retailer DSG International, with stores such as Currys, PC World and Dixons and PPR SA in France, owner of retailer Fnac, Conforama and Surcouf were all raided.
On conducting the raids, the EU executive said: "The Commission has reason to believe that the companies concerned may have violated ... rules on restrictive business practices and/or abuse of a dominant market position."
EU regulators were accompanied by counterparts from relevant national competition authorities.
Giuliano Meroni, AMD president of Europe, Middle East and Africa, said in response to the raids: "This is an important expansion of the Commission's investigation into Intel's illegal business practices and the resulting harm to consumers."
AMD filed a complaint to the commission back in Oct 2000, alleging that Intel illegally exploits its position as the world's dominant chip maker. The commission's investigation opened the following year.
After reopening the case, the commission conducted raids of several Intel offices across Europe in 2005.
The long-running dispute involves litigation in four separate markets: the US, Europe, Japan and South Korea.
The two rivals currently have different fortunes in their financial performances.
Although AMD is the world's second largest maker of microprocessors, it is a much smaller company than Intel and has been struggling in recent years. It is seen as losing some of its competitive edge against Intel because of debt from a costly acquisition and because its technology is aging.
Earlier this month, Intel said it expects sales between 9.4-10.0 bln usd for the quarter. Intel made nearly 7 bln usd last year, an improvement of approximately 2 bln usd over 2006.
AMD, meanwhile, lost nearly 3.4 bln usd last year, dragged down primarily by expenses from a costly acquisition. Sales were 6 bln.
At the end of January, credit rating agency Fitch Ratings downgraded its issuer default rating for AMD to 'B-' from 'B'. Fitch also downgraded AMD's senior unsecured debt.
The agency said the downgrade and negative outlook mainly reflect AMD's operating performance and limited financial flexibility. It said AMD's operating performance was significantly weaker than expected over the last several quarters because of product delays and Intel's strengthening product range.
However, it also said it expects AMD to benefit from anticipated microprocessor unit growth in 2008, a refreshed product range and lower fixed costs following a restructuring in 2007.
The commission's case against Intel is one of a series of other high-profile antitrust investigations in high technology sectors.
Late last month, it fined US software giant Microsoft Corp 899 mln eur for failure to comply with the EU executive's antitrust decision against the company over abuse of its dominance in the software market just under four year ago.
The EU executive has previously launched an inquiry into US chipset manufacturer Qualcomm Inc over licensing terms.
It has also sent charges to US chip technology group Rambus Inc for alleged anti-competitive behaviour over the use of the use of certain patents for Dynamic Random Access Memory chips (DRAMS).
simon.zekaria@thomson.com sz/ejp
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