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By | Kelly Fiveash 20th December 2010 12:33

EU expresses 'private concerns' about Intel buyout of McAfee

Multi-billion dollar takeover could be probed by watchdog

Brussels could kick-start an anti-trust investigation into Intel’s planned $7.68bn buyout of anti-virus software maker McAfee Inc.

European Union watchdogs have privately expressed concerns when undertaking an initial review of the agreement, the Wall Street Journal reported on Friday.

The newspaper cited sources familiar with the matter, who said the concerns surrounding the deal could prompt the EU to probe Intel’s acquisition.

The chip giant wants to buy McAfee and at the same time slot security features into its microprocessor technology.

But Brussels officials are worried that such a move could stifle competition, because McAfee’s knowledge of such security in Intel’s products could strong-arm rivals out of the market.

According to the WSJ, the European Commission has been seeking the opinions of other security software firms about Intel’s proposed buyout of McAfee, which was announced in August this year.

“The questions focus, among other things, on how Intel could embed security functions into its chips and whether any of them could be reserved to work only with McAfee software, according to one questionnaire reviewed by the Wall Street Journal,” said the paper.

“It also asks whether Intel could use McAfee technology to determine which applications are allowed to run on its microprocessors, use a feature called a 'sleeper agent' to launch promotional pop-ups for McAfee software, or reserve maximum chip performance for McAfee software at the expense of software from competitors, according to the document.”

Intel, of course, has form with the EU's anti-competition wing. In May 2009 it was hit with the biggest ever fine from the EC, when it was told to cough up €1.06bn, following an epic eight-year long probe into the company's business practices.

At the time the Commission ordered the chip vendor to refrain from any equivalent practices in the future. It ruled the firm damaged competition by excluding rival AMD from markets. ®

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