Intel Fined Record $1.44 Billion by European Commission
The European Commission found Intel guilty of antitrust violations and fined it a record $1.44 billion. Competition Commissioner Neelie Kroes said that the antitrust action is primarily designed to protect consumers. “Intel has harmed millions of EU consumers”, she said.
The Commission investigation centered around charges that Intel illegally gave rebate to computer manufacturers in return for them buying the bulk of their x86 microprocessors from Intel. the company was also accused of forcing computer makers to cancel or delay the launch of machines using chips made by rival, AMD. Another accusation on Intel is of the company selling its chips for servers at below cost to large customers such as governments and universities to maintain dominance in the industry.
One large antitrust abuse involved giving rebates to Europe’s largest IT retailer, Media Markt, in order to shut out Intel’s closest rival, AMD. Although the rebates resulted in a reduction in retail prices, Kroes said that the harm to consumers stems from their not getting the choice of computers that they would have if AMD wasn’t suppressed. Europe isn’t the only region where Intel has run into trouble with antitrust authorities. In 2005 the company settled with Japan’s competition office. Last year it was fined nearly $20 million in South Korea. Meanwhile, the company is under investigation in the U.S. by the Federal trade Commission.