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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 actually agree with this one...
By omnicronx on 5/13/2009 11:52:06 AM , Rating: 2
Its called extortion. Telling an OEM you will take away their lowered pricing if they did no agree to your terms is illegal. How on earth can these companies compete if they no longer have a competitive advantage against those that agreed to Intel's terms?


RE: I actually agree with this one...
By crystal clear on 5/13/09, Rating: 0
RE: I actually agree with this one...
By BZDTemp on 5/13/2009 3:05:20 PM , Rating: 2
Sine the US is the biggest OPEC customer I think that job falls on the US side of the Atlantic.

As for Russia they are being dealt with but it will take time and essentially things will not really change until they become a democracy. Russia still consider them self a super power so they act like a bully towards everyone not kissing their behind. Just look at their constant provocations with cold war bombers.

Eventually Russia will turn around since their leaders can not supply their citizens with the life they see in the countries they compare them self with. Geographically Moscow is in Europe and before the dictators Russia had close ties with western Europe.


RE: I actually agree with this one...
By crystal clear on 5/13/2009 8:02:06 PM , Rating: 2
quote:
Sine the US is the biggest OPEC customer I think that job falls on the US side of the Atlantic.t


Then even in Intel's & Microsoft case as per your thinking-that job falls on the US side of the Atlantic.

Why does the EU pick American companies to fine them & ignores the OPEC & the Russians.

If Intel was a Russian company I am quite sure the EU would think twice before fining them out of FEAR of recieving a even more harsher response from PUTTIN,


By Danish1 on 5/14/2009 2:38:33 AM , Rating: 2
Because AMD filed a complaint duh RTFA.

I don't think AMD has filed any complaints about OPEC's oil prices.

and btw I don't think OPEC is threatening/bribing anyone that buys Norwegian oil.


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