Print 116 comment(s) - last by iFX.. on May 27 at 5:02 PM

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.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: I would laugh...
By iFX on 5/13/2009 12:50:35 PM , Rating: 1
Are you stupid? We aren't talking about 90s MS. We are talking about 80s MS, when they were nothing, when IBM was a billion dollar organization and MS was in the red. The point is that despite IBM being huge and at the time controlling the PC market MS was able to thrive and survive anyway. They are the perfect example of why big business does not stifle innovation and that singular big business won't be in control forever, other companies will form and grow and that they all start small, against the odds.

Yes, MS took on IBM. Learn the history - what was portrayed in the film that you are no doubt remembering isn't accurate. Learn why Windows was a success and OS/2 was a failure for IBM.

Why am I talking to you? Pillock.

RE: I would laugh...
By omnicronx on 5/13/2009 2:34:17 PM , Rating: 2
You are seriously full of yourself. IBM and MS were partners! IBM chose to use DOS and eventually windows, how on earth can you say there were in competition, especially in the 80s?

IBM was never in direct competition with MS until the OS/2 joint venture was done with, and guess what, that was in the 90's. By that time Windows was a powerhouse, and IBM's OS/2warp never went anywhere.

Furthermore IBM is not the 'perfect' example. They attempted to close out the industry by not allowing PC clones. If not for that innovation would have been stifled as they would have completely controlled the PC market.

So take your own advice and learn your history.

P.S The original OS/2 was the IBM/MS joint venture until 1990. Once again proving your statements incorrect.

RE: I would laugh...
By iFX on 5/13/2009 3:12:55 PM , Rating: 2
You can't read or don't read.

RE: I would laugh...
By omnicronx on 5/13/2009 3:48:29 PM , Rating: 2
Don't you get it? I'm disproving your entire theory. Your entire David vs Goliath theory cannot be correct as they were essentially partners throughout the 80's.

It was not until Microsoft was already a giant that they parted their ways (i.e they were not the little guy, they already controlled the OS market).

IBM tried to control the market and failed to stop PC clones.

MS tried to control the market and was slapped with court orders and fines for being anticompetitive.

And finally Intel tried to control the market and here we are today.

Every single one of these companies tried to get rid of their competition, and most likely would have resulting in the stifling of innovation. It happened with MS getting lazy in the late 90's, happened with Intel getting lazy in the p3/p4 years and it quite possibly could have happened had IBM got their way and made PC-clones illegal.

"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings
Related Articles

Most Popular ArticlesSmartphone Screen Protectors – What To Look For
September 21, 2016, 9:33 AM
UN Meeting to Tackle Antimicrobial Resistance
September 21, 2016, 9:52 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Update: Problem-Free Galaxy Note7s CPSC Approved
September 22, 2016, 5:30 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki