Intel hit back today at fresh anti-trust charges levelled by European regulators.

The world’s largest chip maker is facing a huge fine over accusations that it abused its dominant position in the market to squeeze out its chief rival.

The European Commission sent a letter outlining new complaints about the US giant and its main competitor, Advanced Micro Devices (AMD).

The letter contained three specific charges: that Intel offered discounts to a major European personal computer distributor to favour its products, paid a PC maker to delay marketing a model line using AMD chips, and also paid it to use Intel’s own microprocessors in preference.

The Commission is now considering charges that Intel illegally tampered with both the wholesale and retail channels in an effort to suppress its competitor.

“The Commission also considers at this stage of its analysis that all the types of conduct reinforce each other and are part of a single overall anti-competitive strategy aimed at excluding AMD or limiting its access to the market,” the EU’s executive body said in a statement.

Intel has eight weeks to respond to the latest Commission complaints and can subsequently seek a hearing in Brussels.

If the findings are sustained, Brussels could demand that Intel stop the alleged abuses and impose a hefty fine.

Competition commissioner Neelie Kroes recently fined Microsoft a record €899 million ($1.42 billion) in an antitrust case.

Intel issued a statement calling the accusations “unfounded,” saying they were part of a long-running AMD strategy.

“We are confident that the worldwide microprocessor market is functioning normally and is highly competitive in Europe and elsewhere. Intel’s conduct has always been lawful, pro-competitive and beneficial to consumers,” it said.

The complaint filed by the European Union’s executive arm “suggests that the Commission supports AMD’s position that Intel should be prevented from competing fairly and offering price discounts which have resulted in lower prices for consumers,” the company said.

“It’s clear that the allegations stem from the same set of complaints that our competitor, AMD, has been making to regulators and courts around the world for more than 10 years."

AMD has long accused Intel of using its grip on the market for microchips to choke off competition.

Following an anti-trust investigation of Intel launched six years ago, the Commission sent a list of complaints to the company in July 2007, accusing it of offering “substantial” rebates to computer makers that mostly used its chips.

Intel’s central processing units provide the computing power behind 80 per cent of the world’s personal computers, while AMD controls about 17 per cent.

Meanwhile, AMD posted a wider-than-expected quarterly loss and named a new chief executive as the chipmaker struggled to regain market share from Intel.

But the appointment of Chief Operating Officer Dirk Meyer to succeed Hector Ruiz as CEO did not resuscitate AMD shares, which fell as much as 9 per cent after the earnings report.

Ruiz, who is staying on as Chairman and has been grooming Meyer as a successor for two years, said there was no question that he was the best candidate for the job at AMD.

AMD has been losing market share to Intel and remains a generation behind its rival.

It is banking in part on its Barcelona server microprocessor, now shipping in volume, to turn things around. That chip had been delayed by a flaw.

The company posted a second-quarter net loss of $1.19 billion, or $1.96 per share, compared with a year-ago net loss of $600 million, or $1.09.

AMD’s results come two days after Intel posted a 25 percent gain in net profit as it extended gains in the notebook personal computer market. Intel also gave a revenue forecast for the current quarter that topped expectations.

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