Intel hit with record €1bn EU antitrust fine

Summary:The European Commission finds that Intel tried to shut AMD out of the x86 CPU market by giving rebates and paying PC makers to cancel AMD-based product launches

...the company had taken only 160,000 CPUs for free because to take more would have meant losing Intel's rebate on many millions of CPUs.

Intel also paid computer makers to postpone or cancel the launch of certain AMD-based products or limit the distribution of AMD-based products, the Commission said. In one case, a company was paid to sell its AMD-based business desktops only to small and medium enterprises and only via direct distribution channels. It was also paid to postpone the launch of its first AMD-based business desktop in Europe by six months.

Although many of Intel's violating conditions were not made explicit in the company's contracts, the Commission found proof of their existence in emails obtained through unannounced on-site inspections, formal requests for information and evidence submitted by other companies involved in the case. "In addition, there is evidence that Intel had sought to conceal the conditions associated with its payments," the Commission noted.

Intel said in a statement on Wednesday that it did not believe its practices had violated European law and that it would appeal the fine.

"Intel takes strong exception to this decision," the chipmaker's chief executive Paul Otellini said in the statement. "We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace — characterised by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal."

Otellini said it was "the natural result of a competitive market with only two major suppliers… that when one company wins sales, the other does not".

He added that the Commission had ignored or refused to obtain significant evidence that contradicts the assertions it made in its ruling. This evidence would show that "when companies perform well, the market rewards them; when they don't perform, the market acts accordingly", he said.

However, Otellini pledged that Intel would cooperate with the EU Commission's sanctions while it fought the ruling.

"Despite our strongly held views, as we go through the appeals process, we plan to work with the Commission to ensure we're in compliance with their decision," Otellini said, adding that Intel "never sells products below cost".

Topics: Hardware


David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't be paying many bills. His early journalistic career was spent in general news, working behind the scenes for BBC radio and on-air as a newsreader for independent stations. David's main focus is on communications, of both... Full Bio

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