EU Slaps Intel with Record US$1.45 Billion Antitrust Fine

Santa Clara, California-based Intel, the world's leading vendor of computer processors, has been found guilty of illegal practices by the European Commission, which has imposed a record US$1.45 billion fine on the chipmaker. The commission also ordered Intel to cease any illegal rebates and other practices that were meant to eliminate AMD as a potential market competitor. The ruling, which has been expected since earlier this week, comes as an important step in a case that has been going on since 2001, when the EU Commission started investigating into the chip maker's business practices, following a complaint from AMD.

 

European Union Competition Commissioner Neelie Kroes said in a statement: “Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years.”

 

According to Reuters, the EU executive said that the global leading chip maker had been engaged in anticompetitive practices, like paying computer makers to postpone and cancel plans to launch AMD-based products. The chip manufacturer also illegally offered secret rebates to computer makers that were supposed to use mostly or entirely Intel chips, and paid a major retailer to stock only computers using Intel chips.

 

Following the ruling of the EU Commission, Intel's CEO, Mr. Paul Otellini, said that, “Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal.”

 

The antitrust fine imposed by the EU Commission to Intel is without precedent, exceeding the 896 million Euro penalty imposed last year to glass maker Saint-Gobain and the 497 million Euro fine in 2004 for Microsoft. The chip maker is expected to pay the aforementioned fine within three months of the date of notification on the decision.