BRUSSELS: The European Commission fined Intel Corp. a record 1.06 billion euros ($1.45 billion) yesterday and ordered it to halt illegal rebates and other practices it used to squeeze out its rival, Advanced Micro Devices (AMD).
The world’s biggest chipmaker paid computer makers to postpone or scrap plans to launch products using AMD chips, paid illegal rebates to encourage them to use Intel chips and paid a retailer to stock computers with its chips, the commission said.
The antitrust fine, imposed after an eight-year investigation, is the biggest the European Union’s (EU) executive arm has imposed on an individual company.
Financial analysts said US-based Intel would be able to maintain its market dominance but the EU’s decision could help AMD boost its market share.
“Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years,” European Union Competition Commissioner Neelie Kroes said.
The commission said Intel must cease all illegal practices immediately but Intel President and CEO Paul Otellini said the company would appeal at the Court of First Instance, the EU’s second-highest court. “Intel takes exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor market,” he said in a statement. Kroes said the EU antitrust sanctions would be carried out immediately. In a previous antitrust case against software giant Microsoft, the commission froze its remedies during part of an appeal filed by that company.
Bruce Sewell, a lawyer for Intel, said the firm had not yet begun talks with the commission on how to comply with its ruling and said: “We will try to be compliant with the order.”
The commission said Intel must pay the fine, which represents 4.15 percent of the company’s 2008 turnover, within three months of being notified of the decision.
It could have fined Intel 10 percent of annual revenue.
AMD yesterday welcomed the decision by EU antitrust regulators. “Today’s ruling is an important step toward establishing a truly competitive market,” AMD President and Chief Executive Dirk Meyer said in a statement.
