Big EU antitrust fine likely for Intel

Stephen Withers
Monday, 11 May 2009 11:23

IT Industry - Strategy

Reports from Europe suggest the European Commission (EC) will levy a substantial fine on Intel for breaches of competition rules.

Complaints against Intel's behaviour in Europe involve allegations that the chipmaker took improper steps against competitor AMD.

They include paying manufacturers and retailers to use Intel rather than AMD processors, and in some cases selling CPUs below cost to prevent AMD making inroads at certain vendors.

EC rules allow for fines of up to 10 percent of a company's annual revenue. This means that the Intel ruling could easily set a new record, surpassing the €899 million fine imposed on Microsoft in 2008 for failing to comply with a 2004 antitrust decision.

Intel's 2008 worldwide revenue of $US37.6 billion in 2008 suggests an upper limit of €2.8 billion on the fine. It would be unusual for the EC to impose the maximum penalty, but that still leave plenty of room for a record penalty.

According to a Wall Street Journal report, the EC is framing its decision with particular care in an attempt to stave off a challenge by Intel.

Intel's position is that it has operated within the law.

The company has previously run afoul of fair trade regulators in Japan and Korea.