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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.

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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: I would laugh...
By omnicronx on 5/13/2009 10:58:21 AM , Rating: 2
Wake up? Apparently you've been asleep for the past 8 years. AMD filed suit against Intel in 2005, and the EU's antitrust case has been going on since 2001. Intel did NOT have winning products, and their business strategy involved paying off companies, and forcing incentives down the throats of OEMS with the threat of taking away these incentives if they use AMD products (or keep them to a certain percentage of their products).

Why on earth would these OEM's make formal complaints if they thought what Intel was doing was legal? All these OEM's had to agree with Intel or face the possibility of their competition having an unfair advantage. They were obviously scared, that is the only reason to complain, if they really thought what Intel was doing was legal, why complain at all? They were receiving lower pricing afterall?

And what about Dell kicks backs and the internal Intel emails that magically disappeared when US courts ordered Intel to make them available? What about the Intel and Dell emails that told them to keep quiet about these kickbacks? What about charges stemming as far back as 2000 that Intel gave IBM discounts, rebates, special funds and who else knows what for exclusivity? Or perhaps how Intel paid several manufacturers to delay AMD product launches? All of this happened before the Core line.

The EU is not the first country to make such judgments either, both Japan and South Korea already have, and they are still under investigation by the FTC, with antitrust cases from AMD in the works in both the EU and the US. I suppose if all these cases side with AMD that Intel is still in the right, and that those damn socialists are still looking for a cash grab?


"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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