EU Slaps a Record 1.06bn Euros Fine on Intel

May 13, 2009 - 10:28 am | 23 views

Technology.am (May 13, 2009) — Intel has been fined a record 1.06bn euros ($1.45bn; £948m) by the European Commission for anti-competitive practices.

intel logo The EC found that between 2002 and 2007, Intel had paid manufacturers and a retailer to favour its chips over those of Advanced Micro Devices (AMD). Last year, Intel made 80.5% of all the microprocessors in PCs, while AMD made 12%.

“Intel takes exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor market,” Intel chief executive Paul Otellini said.

Both Intel and AMD are based in California. Intel has 83,900 staff worldwide and has a market value of $85.4bn. AMD employs about 11,000 people and has a market value of $2.6bn.

“The EU decision will shift the power from an abusive monopolist to computer makers, retailers and above all PC consumers,” said Giuliano Meroni, AMD’s European president.

The Commission said that personal computer makers Acer, Dell, HP, Lenovo and NEC had all been given hidden rebates if they only used Intel chips.

It also found that Media Saturn, which owns Europe’s biggest consumer electronics retailer Media Markt, had been given money so that it would only sell computers containing Intel chips.

A Commission spokesman said there was no question of action being taken against the firms who accepted the rebates. “They were not the ones abusing their dominant position in the market,” he added.

The Commission has also ordered Intel “to cease the illegal practices immediately to the extent that they are still ongoing”.

In addition to providing rebates to manufacturers that bought almost entirely Intel products, the Commission found that the chipmaker had paid them to postpone or cancel the launch of specific products based on AMD chips.

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