EU hits Intel with $1.5 billion fine

Brussels, Belgium – European Commission fines Intel $1.5 billion for abuse of dominant position, orders end to illegal practices.

The European Commission has imposed a fine of €1.06 billion ($1.5 billion) on Intel for violating EC Treaty antitrust rules, through the abuse of a dominant market position and engaging in illegal anticompetitive practices to exclude competitors from the CPU market.

The Commission has also ordered Intel to cease the illegal practices immediately. The EU states that between October 2002 and December 2007, Intel had a dominant position in the worldwide x86 CPU market of at least 70 percent market share. The Commission ruled that Intel had engaged in two specific forms of illegal practice.

Intel has announced that it will appeal against the verdict.

“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.

“There has been absolutely zero harm to consumers. Intel will appeal,” he added.

Says the EU statement:

“Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel. Intel also made direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs. Such rebates and payments effectively prevented customers – and ultimately consumers – from choosing alternative products.

“Second, Intel made direct payments to computer manufacturers to halt or delay the launch of specific products containing competitors’ x86 CPUs and to limit the sales channels available to these products. The Commission found that these practices constituted abuses of Intel’s dominant position on the x86 CPU market that harmed consumers throughout the EEA.

“By undermining its competitors’ ability to compete on the merits of their products, Intel’s actions undermined competition and innovation. The Commission will actively monitor Intel’s compliance with this decision.”

Competition Commissioner Neelie Kroes said: “Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. Such a serious and sustained violation of the EU’s antitrust rules cannot be tolerated”.

The computer manufacturers named in the Commission’s decision are: Acer, Dell, HP, Lenovo and NEC. The retailer involved is Media Saturn Holding, owner of the MediaMarkt chain.

The Commission’s investigation followed complaints from AMD in 2000, 2003 and 2006. 

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