Report: European Union Considering Antitrust Investigation Into Intel-McAfee Deal

The European Union is reportedly considering launching an antitrust investigation into Intel’s planned $7.68 billion acquisition of security software vendor McAfee.

Last week, The Wall Street Journal reported that scrutiny from the EU could delay the McAfee transaction, which is scheduled to close in the first quarter fo 2011. According to sources cited in the report, the EU's antitrust regulator has expressed some concerns in private following the EU's preliminary review of the acquisition. The regulator could keep the deal from closing if those concerns lead to a prolonged examination of the acquisition.

The European Commission, the executive branch of the EU, is primarily concerned with Intel's public plans to incorporate security features into its microprocessor chips, which power 90 percent of systems worldwide. The Commission believes Intel could threaten competition in the market by prioritizing the inclusion of McAfee security solutions on Intel microprocessors over competing security vendors' offerings, according to the The Wall Street Journal report.

The European Commission's other concerns in this case include whether Intel might be able to use McAfee's technology to determine which applications are allowed to run on its microprocessors, launch promotional pop-ups for McAfee software using a "sleeper agent," or withold processing capabilities from McAfee's competitors in favor of its new security division, according to the report.

Despite these concerns, many security vendors publically welcomed the Intel-McAfee deal , saying it was a positive development for the market as a whole because it highlights the importance of security within the technology industry.

Intel has pledged to operate McAfee as a separate security division within Intel, and McAfee partners welcomed this, as it settled some uncertainty regarding the margins, pricing structure, and support available to McAfee's partners.

The EU has been keeping close watch on Intel and its attempts to expand its portfolio. Last year, the European Union levied a record $1.45 billion fine against Intelfor undermining competition by excluding rival AMD from markets.

"The commission's decision finds that Intel abused its dominant position in the market for computer chips known as 'x86 central processing units' in violation of Article 82 of the EC Treaty. This violation lasted for more than five years—from late 2002 to the end of 2007," said Neelie Kroes, the European Commissioner for Competition Policy, in a statement at the time.

NEXT: Intel's Settlement With the FTC

The Commission further ordered Intel to refrain from any equivalent anti-competitive practices in the future.

The U.S. government has launched inquiries into Intel's alleged anti-competitive practices. In August, Intel agreed to a settlement with the Federal Trade Commission , which made it illegal for Intel to pay manufacturers and system builders to use Intel technology exclusively, and not purchase chips from Intel's rivals. The FTC does not have jurisdiction over a company's potentially illicit practices until it reaches such an agreement with the company.