Intel is the largest CPU maker in the world and dominates the market in many categories. Allegations were made against Intel in Europe that the company was using its dominant market position to reduce competition and prevent AMD from gaining market share.
DailyTech has been following the EU investigation into Intel closely. This week allegations against Intel were outlined that claimed the chipmaker offered computer makers discounts and incentives to not use AMD products and to cancel AMD products in development.
The New York Times reports that The European Commission has now ruled against Intel and fined the massive chipmaker $1.45 billion. The fine is the largest ever levied against a company by the Commission and eclipses the fine that Microsoft paid to the EU for anticompetitive practices by about two times.
The EU competition commissioner Neelie Kroes says that the massive fine was justified because Intel has denied consumers a choice for CPUs in products. Kroes told the NYT, "[Intel used] used illegal anticompetitive practices to exclude its only competitor and reduce consumers’ choice — and the whole story is about consumers."
Intel CEO Paul Otellini said the firm would appeal the decision. Otellini said, "We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace. There has been absolutely zero harm to consumers."
AMD's Giuliano Meroni, president of European operations said, "[The decision would] shift the power from an abusive monopolist to computer makers, retailers and above all PC consumers."
Kroes also says that Intel went to great lengths to cover up its anticompetitive actions. Part of the ruling against Intel also forces the company to immediately stop offering computer makers rebates that are part of the reason Intel maintains an 80% market share in Europe.
Intel must change these practices immediately pending appeal though it can ask for an injunction. The $1.45 billion fine has to be paid immediately, but will be placed into an account and held until all of Intel's appeals are exhausted. The appeals process could reportedly last for years.
The amount of the fine levied against Intel is certainly massive, but the NYT says it could have been even larger. The European Commission can levy fines as high as 10% of the company's total revenue. With sales of $37.6 billion in 2008, the fine could have reached nearly $4 billion.
Fines collected by the commission are added to its budget, which is around €130 billion reports the NYT. Kroes said, "Now they [Intel] are the sponsors of the European taxpayers."
The huge fine will also serve as a warning to other companies facing investigation by the commission. Regulators in the EU are some of the strictest enforcers of antitrust law in the world. The NYT reports that the EU is so much tougher on antitrust that U.S. firms often file allegations in Europe rather than in America. Intel is also facing inquiries in the U.S. from the FCC over similar allegations.
quote: Everyone always says that, but forgets they WERE in that position 4-5 years ago.
quote: When will your success not depend on your ability to execute and innovate in the semiconductor industry?
quote: But at least we finally got a court ruling on this.
quote: Intel was essentially bribing OEMs not to use competing products
quote: So the OEMs/dealers/vendors should also be fined equally & accordingly.
quote: Sine the US is the biggest OPEC customer I think that job falls on the US side of the Atlantic.t
quote: "Now they [Intel] are the sponsors of the European taxpayers."
quote: quote: "Now they [Intel] are the sponsors of the European taxpayers."
quote: BTW, does anyone know when the antitrust suit in the U.S. is schedule to go to trial?
quote: imagine what would happen if Intel lost the rights to the past 10 years of AMD IP, while AMD retained all of their rights to Intel IP.
quote: If the AMD product was so good why aren't they the dominate supplier in Europe.
quote: Kroes said, "Now they [Intel] are the sponsors of the European taxpayers."
quote: Fines collected by the commission are added to its budget, which is around €130 billion reports the NYT. Kroes said, "Now they [Intel] are the sponsors of the European taxpayers."
quote: DT readers please research on this subject before you post your idiotic comments on how you hate Europe
quote: If these rebates were so 'anti-competitive', why wasnt AMD offering the same thing? Intel wasnt putting a gun to anyone's heads - they were just playing hardball
quote: If these rebates were so 'anti-competitive', why wasnt AMD offering the same thing?
quote: Now that you have no argument you are baiting on semantics to move focus away your own failure to bolster your misguided and factually incorrect points.
quote: Microsoft's success was perpetrated primarily through their resourcefulness and ability to offer products people wanted to buy - and no huge corporation could stop them.
quote: Point, set, match.
quote: Microsoft is the perfect example during their early years. Whatever they may or may not be guilty of later in their history is irrelevant to the fact that they did indeed take on IBM and that IBM was unable to stop them.