Feb. 12 (Bloomberg) -- European Union antitrust regulators ramped up their investigation of Intel Corp. by raiding the world's biggest computer-chip maker's offices in Munich and computer retailers in the U.K., France and Germany.

EU officials inspected offices of German retail chain Media Markt, DSG International Plc in the U.K. and France's PPR SA, the companies said. Intel is cooperating with the investigation, company spokesman Chuck Mulloy said.

``We believe the microprocessor market is functioning as one would expect a normally functioning competitive market to behave,'' Mulloy said today in a phone interview. ``Our business practices are lawful and we hope to convince the commission that we have violated no laws.''

The raids follow charges by the European Commission in July that Intel unlawfully wrested sales away from ``its main rival'' in the more than $30 billion microprocessor market. Advanced Micro Devices Inc., Intel's largest competitor, told regulators that Intel offers rebates to stifle competition. Intel will respond to the claims at a hearing next month.

``Either something may have happened since the last statement of objections was made by the commission or it could be a completely different matter,'' said Mike Pullen, head of European competition and regulatory affairs at law firm DLA Piper in London, who isn't involved in the case. ``The details are still confidential.''

AMD's Complaint

The commission, the EU's antitrust authority in Brussels, began a probe in 2005 by conducting surprise visits at Intel's European offices. The probe was prompted by a complaint from Sunnyvale, California-based Advanced Micro.

Intel, based in Santa Clara, California, has said competition hurt both its own and Advanced Micro's earnings, a sign that the processor market is competitive.

Intel rose 22 cents to $20.90 in Nasdaq Stock Market trading at 4 p.m. The stock has fallen 21.6 percent this year.

``These things are always more noise than substance until one of them proves to be material,'' said Doug Freedman, an analyst at American Technology Research in San Francisco. He has a ``buy'' rating on Intel's shares and doesn't own them.

The commission's first investigation focused on Intel's relationship with PC makers. Today's raids targeted Intel's possible links with computer retailers.

Commission Statement

The commission said in a statement in Brussels that ``it has reason to believe'' that the companies may have violated EU rules on restrictive business practices, abuse of a dominant market position, or both. The commission didn't identify the companies.

DSG, which owns the Currys chain, said its offices in Hemel Hempstead in the U.K. were inspected as part of ``the ongoing investigation between Intel and AMD.''

PPR, owner of retailers Conforama, Surcouf and Fnac, said the company was visited by EU officials as part of the probe.

``PPR and its companies are only concerned by this probe because it markets products by Intel, among others,'' PPR's Paris-based spokeswoman Charlotte Judet said by telephone. The commission's visits took place at the company's purchasing center outside Paris.

Commission officials also visited the headquarters of Metro AG's Media Markt in Ingolstadt to conduct interviews, Sven Jacobsen, a spokesman for the company said today. The commission said in 2006 that it was taking over a complaint filed with German regulators by Advanced Micro.

Under EU rules, companies can be fined up to 10 percent of annual sales for antitrust violations.

`Important Expansion'

``This is an important expansion and escalation of the commission's investigation into Intel's illegal business practices and the resulting harm to consumers,'' Michael Silverman, an Austin, Texas-based spokesman for Advanced Micro, said today in a phone interview.

Japan's Fair Trade Commission in March 2005 ruled Intel unlawfully offered discounts to PC makers if they agreed to limit their business with rivals. The company disputed the allegations and said it would remove clauses restricting Japanese PC makers from using other companies' chips.

To contact the reporters on this story: Matthew Newman in Brussels at Mnewman6@bloomberg.net; Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net.

Last Updated: February 12, 2008 16:02 EST