Intel, the US microchip maker, has been accused by the European Commission (EC) of attempting to push Advanced Micro Devices (AMD) out of the market by using a series of dubious business practices to undermine its smaller American rival.

Intel has 10 weeks to respond to the EC's antitrust charges, which could cost the company up to 10 per cent of its turnover, as much as $3.5 billion, if it is found guilty of the claims.

It is alleged Intel paid manufacturers to either delay or cancel the launch of products that contained AMD technology. Intel also apparently granted its customers large rebates if they bought its products while Intel was charging below the market price for its microprocessors.

Intel said it had done nothing wrong and said today that it looked forward to responding to the charges. At the same time, Intel announced a lacklustre set of second quarter figures, which were up on the same three months of last year but largely down on Intel's results in the first quarter of 2007.

Revenue during the three months to June 30 reached $8.7 billion, showing an 8 per cent increase on the same period last year but a 2 per cent decline on the first quarter.

Compared to last year, operating profit increase by 26 per cent to $1.3 billion but slowed by 19 per cent from the first three months of Intel's financial year. Net income of $1.3 billion rose by 44 per cent on the second quarter last year but dropped by 19 per cent compared to the first three months of 2007.

Revenue during the first six months of the year rose from $16.9 billion to $17.5 billion while income increased from $7.8 billion to $9 billion. However, margins contracted from $9.1 billion in the first six months of last year to $8.5 billion.

Intel now expects revenue to reach between $9 billion and $9.6 billion in the third quarter.

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