EU hits Intel with $1.45 billion antitrust fine
Intel has been fined more than 1 billion euros by the European Commission for violating antitrust legislation, following a lengthy investigation prompted by complaints made by its chipmaking rival Advanced Micro Devices.
Intel is being fined 1.06 billion euros ($1.45 billion) for engaging in illegal anticompetitive practices to exclude competitors from the market for computer chips called x86 central processing units (CPUs), the Commission said in a statement Wednesday.
“Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years,” competition commissioner Neelie Kroes said in the statement. “Such a serious and sustained violation of the EU’s antitrust rules cannot be tolerated.”
Between October 2002 and December 2007, Intel held more than 70 percent of the worldwide x86 CPU market. The Commission found that during the period in question, Intel engaged in two illegal practices. The first was that it gave wholly or partially hidden rebates to computer manufacturers on the condition that they buy all or almost all of their x86 CPUs from Intel. This illegal practice also included Intel’s making direct payments to a major retailer so that it would stock only computers with Intel x86 CPUs.
The second illegal practice was that Intel made direct payments to computer manufacturers to halt or delay the launch of specific products containing competitors’ x86 CPUs and to limit the sales channels available to these products.
The computer manufacturers named by the Commission as being involved in the rebates and payments included Acer, Dell, Hewlett-Packard, Lenovo, and NEC. The retailer was Media Saturn Holding, the parent company of the MediaMarkt chain.
Intel has been ordered by the Commission to stop any of the anticompetitive practices in which it may still be engaged. The EU commissioners said these practices had harmed consumers throughout the European Economic Area and undermined competition and innovation.
The 1.06 billion euro fine is the largest antitrust penalty the Commission has ever imposed, beating the 497 million fine levied on Microsoft in 2004 for abusing its market dominance. In February 2008, Microsoft’s failure to pay that fine resulted in a further 899 million euro penalty, a decision that Microsoft is appealing.
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