Brussels fines Intel record €1bn for abuse of dominant position

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The Independent Online

The European Commission has slapped a record €1.06bn (£951m) fine on the computer giant Intel for illegal anti-competitive practices over a five-year period.

The Competition Commissioner Neelie Kroes said yesterday: "Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated."

Brussels said Intel in effect paid manufacturers not to use rival Advanced Micro Devices (AMD) technology. The severity of the fine "takes account of the duration and gravity of the infringement", it said.

Intel's chief executive Paul Otellini hit back: "Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace." The group will appeal.

Thomas Vinje, a partner at the law firm Clifford Chance, said: "Had Intel been more conciliatory, this need not have happened. They chose to play hard ball and are now paying the price," adding: "Assuming the commission has solid facts to back up the decision, any appeal by Intel looks unlikely to succeed."

The censure refers to a particular x86 central processing unit (CPU), which makes up the main hardware component of a computer. The market for the chips is worth €22bn a year.

The investigation followed three complaints by AMD, Intel's only competitor. "Today's ruling is an important step toward establishing a truly competitive market," said Dirk Meyer, AMD's chief executive.

The regulator said it had "ordered Intel to cease the illegal practices immediately". Between October 2002 and December 2007, Intel held at least 70 per cent of the worldwide x86 CPU market. The commission said Intel had given rebates to manufacturers as long as they bought most of their x86 chips from Intel. The computer giant also paid computer manufacturers to delay or halt production of computers with x86 CPUs produced by AMD, the commission added in its report.