EC hands Intel €1bn fine for abusing market dominance


EC hands Intel €1bn fine for abusing market dominance

Simon Quicke

The EC has handed Intel a fine of €1.06bn and ordered the vendor to halt its illegal rebates and other practices that are designed to undermine its arch rival AMD.

The spectre of a fine has been hanging over Intel for months as the EC moved through an investigation that became increasingly bitter as the vendor accused the European governing body of being biased in its handling of the case.

The first indications that the EC was likely to find against Intel emerged last summer when some news wires picked up on insider reports that there had already been conclusions reached that Intel acted in an anti-competitive way.

Intel was found to have abused its dominant position in the chip market for five years, from late 2002 to the end of 2007 and to have used its market leading position to muscle out AMD.

Resellers have evidence as part of the investigation and various companies claimed that the anti-competitive behaviour contributed to them going out of business.

Neelie Kroes, European Commissioner for Competition Policy, announced the fine and outlined the reasons for finding against Intel, which it believed had continued to abuse its market position.

"The Commission has ordered Intel to cease the illegal practices immediately, to the extent that they are still ongoing, and to refrain from these and any equivalent practices in the future. The Commission will be monitoring Intel's compliance closely," she said.

"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," she said.

The case first came to light when AMD filed a complaint in 2000 that alleged that manufacturers had been paid not to use its chips.

"The Commission Decision contains evidence that Intel went to great lengths to cover-up many of its anti-competitive actions. Many of the conditions mentioned above were not to be found in Intel's official contracts," added Kroes.

Up until this date the highest fine handed out by the EC was to Microsoft for €474m in 2004 for abusing its dominant market position.

Intel is holding a press conference to react later today.

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