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Fine is the largest ever levied for antitrust violations in the EU

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.

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.

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RE: Finally!
By inperfectdarkness on 5/13/2009 10:19:44 AM , Rating: 1
you know...that's an awesome idea.

anti-trust legislation should reward the spoils to the competition--NOT the consumers. that's probably the fastest, most productive way to push for a balance in the marketplace. the monopoly is losing; the upstart gaining. it's about the quickest way to help close the "gap" between them.

all we need is to regulate that said spoils go to infrastructure--NOT employee compensation packages.

besides...when was the last time you heard of any consumer actually reaping anything significant as the result of anti-trust litigation--DIRECTLY.

RE: Finally!
By AstroGuardian on 5/13/2009 10:54:59 AM , Rating: 3
Noo!! Wrong. It's catastrophic idea. The reward should not go to the competition and put them in advantage. The consumers are the victims here and not the competition. The competition did not succeed to offer quality products and gain the trust of the consumers so the consumers were forced to buy Intel products. And that's why the consumers should be "un-damaged"

RE: Finally!
By inperfectdarkness on 5/13/2009 3:47:33 PM , Rating: 2
so you would rather the money go to the EU?

RE: Finally!
By AstroGuardian on 5/14/2009 10:41:20 AM , Rating: 2
The main question is where money should NOT go. The money should not go to the competition since they did nothing to earn them. SO my answer is YES! The money should go to EU budget so the customers will receive bigger budget for public spending.

The main thing is the money should be taken away from Intel and not go to AMD. That's just.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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