It has not been a good start to the year for Intel.  Not only has the chip-maker announced that its fourth quarter earnings are down 39 per cent, its stock has fallen over the last couple of days, it has slashed its workforce substantially (by mid 2007 the number will be nearly 10,000) but it is also at the heart of a major competition enquiry.

To make matters worse the EU Commissioner is now under pressure from EU anti-trust experts to make a decision on whether Intel's behaviour has contravened competition law.  The answer the experts are looking for is "Yes".  Such a claim has been levelled at Intel by Advanced Micro Devices (AMD) who has said that Intel has abused its dominant market position. 

So what could this mean for Intel?  Abusing a dominant market position is a pretty serious offence under competition law.  Any company doing so would be held in breach of Article 82 of the EC Treaty and potentially subject to a substantial fine.  It is not so long ago that Microsoft showed us just how large this fine could be. 

In 2004 Microsoft was fined €497m for abusing its "near monopoly" on computer operating systems.  In addition to this hefty fine, the Commission gave the corporation 90 days in which to make available a European version of its Windows operating system to PC makers without a media player and 120 days to give programming codes to rivals in the server market to allow them to develop their products in order that they would have full "interoperability" with desktop computers using Windows.  Again in July last year, Microsoft received a second fine of €280.5m for continued non-compliance with the 2004 order which compelled it to share complete interoperability information.

Even though it is important to preserve competition in the market place to sustain business and for the sake of the consumer, there perhaps comes a point at which it seems that a competition judgment is the price a company will pay for attaining success and a dominant position in the market.  For years of hard work and careful manufacture, Microsoft and perhaps Intel too, are asked, as a result of competition rulings, to share their trade secrets with the very organisations they have worked so hard to surpass.  Which begs the question: at this level is competition law really able to protect consumers, or do companies just see it as a success tax?"