EU slams Intel with record $1.45 billion fine

The EU slammed Intel with the biggest antitrust fine in history -- $1.45 billion, the LA Times reported.
Written by Richard Koman, Contributor

The EU slammed Intel with the biggest antitrust fine in history -- $1.45 billion, the LA Times reported.

"Intel did not compete fairly, frustrating innovation and reducing consumer welfare in the process," Neelie Kroes, the European Commissioner for Competition Policy, said at a Brussels news conference announcing the fine. "Given that Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for over five years, the size of the fine should come as no surprise."

The major anticompetitive behavior was conditioning rebates to the big OEMs (Dell, HP, Lenovo) on the condition that they buy from Intel, shutting AMD out of the market.

"Intel awarded major computer manufacturers rebates on condition that they purchased all or almost all of their supplies, at least in certain defined segments, from Intel," the Commission concluded.

If Kroes thinks the fine - bigger even than the $1.23 billion ticket Microsoft received - is no surprise, Intel CEO Paul Otellini disagrees. In a statement, Intel said:

Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal.

Look for the Federal Trade Commission to be reading the EU report with great interest. The US investigation only started in June 2008, while the Europeans have been investigating since July 2007. "The relief that the Europeans imposed I think will provide an excellent guide to U.S. enforcers as they try to determine what to do about Intel's exclusionary conduct," David Balto, a former antitrust official at Justice and the FTC said today.

Kroes had harsh words for Intel as she mocked their "sponsors of tomorrow" marketing campaign.

Their website invites visitors to add their 'vision of tomorrow,' " she said. "Well, I can give my vision of tomorrow for Intel here and now: "Obey the law".

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