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EU Fines Intel A Record $1.45 Billion

Violation of antitrust rules

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The European Commission has imposed a record fine against Intel Corp of $1.45 billion (1.06 billion euros) for violating antitrust rules and other practices used to exclude competitor AMD from the computer chip market.

"Given that Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for over five years, the size of the fine should come as no surprise," European Union Competition Commissioner Neelie Kroes told a news briefing Wednesday.


Neelie Kroes

The Commission found that Intel gave wholly or partially hidden rebates to computer manufacturers on the condition they bought all, or almost all, their chips from Intel. Intel also made direct payments to a major retailer on the condition it stock only computers
 with Intel chips.

In addition, Intel made direct payments to computer manufacturers to halt or delay the launch of specific products containing competitors’ chips and to limit the sales channels available to these products.

The Commission has ordered Intel to cease the illegal practices immediately to the extent that they are still ongoing.

Intel President and CEO, Paul Otellini said the company plans to appeal at Europe’s Court of First Instance.

"Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace," he said.

The EU antitrust fine is the largest levied on an individual company since an 896-million euro penalty last year against glass maker Saint-Gobain for price fixing, and a 497-million euro fine in 2004 on Microsoft for abuse of dominance.

The Commission said Intel must pay the fine, which accounts for 4.15 percent of the company’s 2008 turnover, within three months of the date of the notification of the decision.

 

EU Fines Intel A Record $1.45 Billion
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