Brussels raids DSG amid inquiry into Intel

The offices of the electrical goods company DSG International were raided yest-erday as part of an inquiry into market abuse at the world's biggest chip maker Intel.

European Commission investigators also swooped on Intel's bureau in Munich and those of the German retailer Media Markt-Saturn, another company selling the chip maker's products.

The unannounced raids by the EU's anti-trust watchdog were part of an ongoing investigation into Intel, which has been accused of trying to abuse its dominant market position by slashing prices on products to below cost price and making cash payments to customers.

Around a dozen EU officials visited the Hemel Hempstead offices of DSG, the Currys and PC World owner, to inspect the retail support centre.

A DSG spokesman confirmed the visit. "We understand similar inspections have taken place at other companies' premises," he said, adding the company was co-operating with the investigation. He declined to give further details.

The investigation began after a complaint from Advanced Micro Devices that Intel was trying to drive it out of business and hold on to its share of the semiconductor market . In 2005, AMD alleged DSG, which was then known as Dixons, had taken payments from Intel in return for keeping AMD's share of its business to below 10 per cent. Dixons denied this charge.

A series of raids on Intel offices across Europe were carried out in 2005. The initial findings of the investigation, which were unveiled last summer, concluded that Intel engaged in anti-competitive action to thwart AMD. The company was accused of abusing its dominance of the market for central processing units (CPUs) in an attempt to drive its rival firm AMD out of the market and of offering incentives to companies to delay or cancel products containing AMD technology.

Yesterday's raids turned up the heat on Intel as it prepares for a closed hearing in Brussels in March to answer the charges.

Jonathan Todd, from the EU Commission, said officials, who were accompanied by local law enforcement staff, "carried out unannounced inspections at the premises of a manufacturer of central processing units and a number of personal computer retailers".

He added that the raids were conducted because the commission had reason to believe the companies "may have violated EC [European Community] Treaty rules on restrictive business practices and/or abuse of a dominant market position".

Chuck Mulloy, a spokes-man for Intel, said: "I can confirm that there has been a raid on our offices in Munich. As is our normal practice, we are cooperating with authorities."

Media Markt-Saturn, a subsidiary of the trading company Metro, which controls most of Germany's retail electronics market and operates in other countries as well, was also already being investigated due to its links with Intel. It sells PCs with CPUs from Intel, but not those by AMD.

The commission has powers to fine companies up to 10 per cent of their global annual revenue for competition abuses. Intel has previously said that it had behaved within the law.