Intel fined 1.45 billion by the EU for anti-competitive practices; will appeal decision

By on May 13, 2009 at 2:56 PM
Retail May 13, 2009

Intel faces a record 1.45 billion fine imposed by the EU on Tuesday for alleged anti-competitive practices designed to muscle its rival AMD out of the chipset market in Europe. The eight-year investigation into the company began in 2001 after AMD filed a complaint about Intel the year prior. Results of the EU investigation reveals that Intel used its dominant financial position to pay computer manufacturers Acer, Dell, HP, Lenovo, and NEC as well as smaller retailers to postpone, cancel or avoid using and/or selling AMD products. Neelie Kroes, the Europen Union competition commissioner, further added that Intel “went to great lengths to cover up its anti-competitive actions.” The EU ordered Intel to immediately cease its anti-competitive practices and pay the hefty fine, though the amount would be held in a bank account, during the ensuing appeal process. As expected, Intel responded on Wednesday denying the allegations and vowing to appeal both the financial award and the order to change its practices. In its statement, Intel agreed to abide by the EU’s decision during the appeal process. Hit the jump for the full text of Intel’s rebuttal.

EC Ruling: Statement by Intel President and CEO Paul Otellini

SANTA CLARA, Calif., May 13, 2009 – Paul Otellini, Intel Corporation president and CEO today issued the following statement regarding the European Commission decision on Intel’s business practices:

“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.”

“We do not believe our practices violated European law. The natural result of a competitive market with only two major suppliers is that when one company wins sales, the other does not. The Directorate General for Competition of the Commission ignored or refused to obtain significant evidence that contradicts the assertions in this decision. We believe this evidence shows that when companies perform well the market rewards them, when they don’t perform the market acts accordingly.”

“Intel never sells products below cost. We have however, consistently invested in innovation, in manufacturing and in developing leadership technology. The result is that we can discount our products to compete in a highly competitive marketplace, passing along to consumers everywhere the efficiencies of being the world’s leading volume manufacturer of microprocessors.”

“Despite our strongly held views, as we go through the appeals process we plan to work with the Commission to ensure we’re in compliance with their decision. Finally, there should be no doubt whatsoever that Intel will continue to invest in the products and technologies that provide Europe and the rest of the world the industry’s best performing processors at lower prices.”

More information about Intel and “Competition in the Innovation Economy” is available at www.intel.com/pressroom/legal.

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12 Comments

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  • Shonuff

    Infail Inside.

  • Truman

    AMD sucks ass. Its too bad consumers are duped in to buying a machine presuming Mhz from one company = anothers. Intel was just keeping uninformed or non-gamers from making a mistake.

  • Dtest54

    You play the game and sometimes you have to pay to win. This sounds like a lot of $$ but they likely made way more in keeping AMD out of the picture as much as possible.

  • Minty

    I buy AMD products because they fit my needs are are cheaper. Of course I don’t play video games, so having the fastest processor is not a issue for me.

  • KimH

    I find it STUPID, that an American company (AMD) can use the Europeans and Japanese, to file suit against another American company (Intel) on foreign soil, for something that happened for the most part, in the US. Since Intel was FINED 1.45 Billion dollars, I’m guessing AMD was not awarded that money, it’s just going to go into European coffers. Since the vast majority of Intel’s alleged wrongdoing likely happened in the US, why not let the US courts decide the matter in its entirely, rather than running to, and enriching other countries? I suppose we are to believe that the 1.45 Billion is only to address the European component of Intel’s malfeasance in this matter? Or, Intel’s harsh tactics were only employed in Europe?

    Sounds more like some brat running to Mom, when Dad said no. T

  • dtest54

    KimH, please reread. Its the EU filing a anti-monopoly suit. It is not AMD filing suit against Intel. And Intel sells tons of hardware in Europe so not sure why you think this should be in the US? I think you need to reread it and perhaps look into international business laws as the EU is representing the people not AMD.

  • mingkee

    AMD will be no more, it’ll become Samaung, no matter you like it or not

  • zephxiii

    0wn3d

  • melvin

    **dtest54** your an idiot ok thats what you need to read that your an idiot.

  • Lou Ceifer

    Melvin, do the rest of us a favor and STFU if you don’t have anything constructive to add to this discussion, thanks in advance.

    What Dtest54 said was right on the mark, Intel’s been playing dirty for years in the semi-conductor industry trying to eliminate their competition(read: AMD and they’ve already elimnated Cyrix, they’ve effectively neutered VIA) for years and now they got busted for it, it’s as simple as that. Go read up about ZILOG and Intel’s history back during the 70s! AMD is viewed just as much a threat to Intel’s dominance in their eyes as Zilog was, this is why they seek to destroy them by any means! If it weren’t for IBM’s stepping in and making Intel a main supplier for it’s processors back in the day, Intel most likely would be a distant memory today because Zilog almost ran them of the business completely with it’s Z80 processor! If we are reduced to nothing but Intel on the market and AMD is lost, we will fall right back into the monopoly that Intel lavished in during the 80s and early 90s with no competition. You can rest assured Intel will jack up it’s prices accordingly. Expect to see $1,200 entry level Intel processor prices and $600 low-end Intel motherboard prices if this happens. So whether you like it or not, WE ALL NEED AMD and it’s in your best interests as consumers to keep them around, period.

    This suit petitioned by AMD to the EU Commission has been going on for YEARS and just now finally getting a ruling from years of investigation, evidence and inquiry and now finally penalizing Intel with a fine. Intel may be a US company but they also have offices and do major business in the EU therefore, they are subject to their authority as such in the EU! Again for the intel fanboys read: Intel is originally a US company but they are now and have been for a while now, a WORLD-WIDE corporation. You want to do business world-wide? You play by OTHER COUNTRIES rules, simple as that.

    Bottom line: Melvin, Truman, KimH and Mingkee need to suck these facts up just like Intel, Otellini and any other Intel fanboys need to. The chickens eventually come home to roost boys, remember that, play the game long enough and you WILL get burned by someone, that you can take the bank.

  • Louis

    Some poofter wrote:
    “the EU is representing the people not AMD”

    Yeah right… The EU didn’t like the fact that Intel was selling faster processors at lower prices than the year before?

    I don’t think the EU demonstrated any actual harm caused to EU consumers. I wouldn’t be at all surprised as a result of this action that CPU prices in the EU go up because Intel CPUs are now going to cost more to manufacturers because they can’t issue rebates. AMD still has a production constraint so they will not be able to pick up the slack demand.

    Also, if the EU trade commission was representing the people, I expect they be issuing rebates to consumers supposedly harmed by Intel? I won’t hold my breath on that. Since they probably can’t even quantify nor identify the harmed consumer, this is tantamount to a tax on Intel in the EU.

  • KimH

    I’m no fanboy of anyone, and would have no problem if a US court layed the smack down on Intel for what they’ve done. Of all the consumer’s “injured” by Intel’s actions, the vast majority are in the US. So now, we have a US company sending BILLIONS of dollars to Europe, because AMD couldn’t win the same fight here in US courts. Essentially, AMDs actions have allowed Europe to hijack 1.45 Billion dollars out of the US economy, because AMD couldn’t stand up to it’s bigger rival. AMD isn’t going to get any of that money, nor will the employees or vendors of either AMD or Intel.

    Sure, AMD is simply using all of the legal remedies available to them. I don’t have to like it or agree with it. Perhaps California should fine AMD, for its part in reducing the taxes that Intel might have payed to the state.

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