Brussels fines Intel record $1.4bn
By Nikki Tait in Brussels and Chris Nuttall in San Francisco
Published: May 13 2009 10:45 | Last updated: May 13 2009 19:14
Intel, the world’s largest chipmaker, has been fined a record €1.06bn ($1.44bn) by Europe’s competition authorities for abusing its dominant market position and using illegal sales practices to encourage computer manufacturers to carry its micro-processor chips.
The fine, which follows a decade-long investigation by the European Commission, is the largest single penalty to be imposed on a company for antitrust breaches in Europe.
The commission also ordered Intel to “cease illegal practices immediately”. It is to monitor future conduct.
But Intel pledged to appeal against the decision, denying its practices had violated European law. “We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace,” said Paul Otellini, Intel’s chief executive.
Lawyers said the scale of the penalty, coupled with the more aggressive stance on antitrust issues outlined by the new Obama administration in the US, was bound to increase anxieties at other companies. “There are no doubt some nervous large technology companies out there at the moment – and that won’t be helped by recent pronouncements [by] the new head of the US antitrust watchdog that suggest the US will be joining the EU’s crusade,” said Mark Tricker at Norton Rose.
The commission said the illegal practices, between 2002 and 2007, involved conditional rebates to computer makers such as Acer and Dell and had the effect of pushing out competitors.
They included illegal payments to German retailer MediaMarkt on condition it exclusively sold Intel-based personal computers.
The fine’s size reflects the scale of Intel’s sales in Europe during that period, and the length of time the abuse continued.
Neelie Kroes, the EU competition commissioner, said: “The commission finds that Intel did not compete fairly . . . Given that Intel has harmed millions of consumers . . . the size of the fine should come as no surprise”
The case, centred on the market for x86 computer processing units – worth about €7bn a year in Europe – began in 2000, after a complaint filed by rival Advanced Micro Devices.
AMD said on Wednesday the decision was important to establish a truly competitive market. “The message to computer manufacturers is that they are now free to differentiate product lines,” said Tom McCoy, AMD’s vice-president for legal affairs.
Copyright The Financial Times Limited 2009
By Nikki Tait in Brussels and Chris Nuttall in San Francisco
Published: May 13 2009 10:45 | Last updated: May 13 2009 19:14
Intel, the world’s largest chipmaker, has been fined a record €1.06bn ($1.44bn) by Europe’s competition authorities for abusing its dominant market position and using illegal sales practices to encourage computer manufacturers to carry its micro-processor chips.
The fine, which follows a decade-long investigation by the European Commission, is the largest single penalty to be imposed on a company for antitrust breaches in Europe.
The commission also ordered Intel to “cease illegal practices immediately”. It is to monitor future conduct.
But Intel pledged to appeal against the decision, denying its practices had violated European law. “We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace,” said Paul Otellini, Intel’s chief executive.
Lawyers said the scale of the penalty, coupled with the more aggressive stance on antitrust issues outlined by the new Obama administration in the US, was bound to increase anxieties at other companies. “There are no doubt some nervous large technology companies out there at the moment – and that won’t be helped by recent pronouncements [by] the new head of the US antitrust watchdog that suggest the US will be joining the EU’s crusade,” said Mark Tricker at Norton Rose.
The commission said the illegal practices, between 2002 and 2007, involved conditional rebates to computer makers such as Acer and Dell and had the effect of pushing out competitors.
They included illegal payments to German retailer MediaMarkt on condition it exclusively sold Intel-based personal computers.
The fine’s size reflects the scale of Intel’s sales in Europe during that period, and the length of time the abuse continued.
Neelie Kroes, the EU competition commissioner, said: “The commission finds that Intel did not compete fairly . . . Given that Intel has harmed millions of consumers . . . the size of the fine should come as no surprise”
The case, centred on the market for x86 computer processing units – worth about €7bn a year in Europe – began in 2000, after a complaint filed by rival Advanced Micro Devices.
AMD said on Wednesday the decision was important to establish a truly competitive market. “The message to computer manufacturers is that they are now free to differentiate product lines,” said Tom McCoy, AMD’s vice-president for legal affairs.
Copyright The Financial Times Limited 2009
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