EU Fines Intel $1.45 Billion for Antitrust Violations

The European Union's (EU's) attack on the largest US-based technology firms continued this week, with Intel receiving a record $1.45 billion fine for using illegal sales tactics to push rival AMD out of the market. Intel described the decision as ignorant and said that it would appeal.

"Intel takes strong exception to this decision," Intel CEO Paul Otellini said. "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."

According to the EU, Intel is "an abusive monopolist" that exploited its power to reduce consumer choice. It paid rebates to PC makers that used its chips and paid electronics retailers in Europe to stock only Intel-based PCs.

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

Intel denied each of the EU's claims. But it also took the additional step of accusing the EU's Directorate General for Competition of "ignoring or refusing to obtain" evidence that directly contradicts the claims made against Intel.

Intel controls about 80 percent of the market for PC microprocessors, and AMD is its only viable rival. Aside from the legality of Intel's supposed backroom deals, AMD simply makes inferior products, and the gap is growing. In fact, AMD only briefly commanded any sort of technical lead over Intel, when it pioneered the x64 platform now used as the basis for most modern PCs. Once Intel jumped onboard with x64 designs of its own, AMD simply began fading again.

AMD might benefit from Intel's legal troubles. In addition to the EU, antitrust regulators in South Korea fined Intel $21 million last year and continue their pursuit of the company. And in the United States, the Federal Trade Commission (FTC) is also investigating Intel for antitrust abuses.

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