The 9-year-long antitrust battle between Intel and the European Union (the European Commission, to be exact) ended today and there is a clear loser: Intel. The company faces a $1.45 billion fine for abusing its No. 1 position in the market for computer chips. This is the highest fine the European Commission has ever imposed on a company.
Apart from the financial punishment, Intel was ordered to stop illegal rebates and other dubious practices to fence out other chip makers on the European market. A spokeswoman of the Commission summarized the verdict as follows: “Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years.”
According to the Commission, Intel abused its dominance between 2002 and 2007, for example by:
- giving discounts to Europe’s leading home electronics retailer Media Saturn Holding under the condition it sells Intel-powered PCs only
- paying a “leading manufacturer of computers” for postponing the market entry of products equipped with AMD chips
- giving rebates to companies such as NEC, Lenovo or HP provided they use Intel chips
This is a very bitter pill to swallow for Intel as around a third of total sales (worth $37.6 billion last year) is generated in Europe. It’s estimated that Intel controls about 80% of the worldwide market for computer chips with AMD being a distant second.
The verdict is final and Intel was ordered to pay the fine within three months after it’s officially notified of the decision.