Intel fined record $1.45 billion
The European Union has hit Intel with a record fine for anti-competitive behavior. But the firm says it can’t understand the detail of the ruling and complains, “Antitrust agencies are testing the boundaries of the law.”
The fine is 1.06 billion euros, equivalent to $1.45 billion, the heaviest penalty ever imposed by the EU for competition law breaches. The European Commission member responsible for competition policy, Neelie Kroes, told the Associated Press, “Given that Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for over five years, the size of the fine should come as no surprise.”
The EU has also ordered Intel to cease the actions which led to the case, though the firm says the detailed ruling is not clear about exactly what this entails. It has agreed to abide by the ruling while preparing an appeal, a process which could last several years.
The case centered on rebates offered by Intel to manufacturers which buy large volumes of the company’s chips. European regulators say such behavior is not illegal in itself, but that Intel broke the rules by making the rebates conditional on firms agreeing to limit their purchases of chips from rival Advanced Micro Devices. Intel flatly denies this allegation, pointing to the contracts it uses which don’t mention such conditions. The regulators say the conditions did exist but were kept out of the contracts to cover up the illegal activity.
Bruce Powell, Intel’s Senior Vice President, responded to the ruling by complaining that regulators – both in Europe and Asia (where the firm was recently fined $25 million for similar offenses) – are effectively creating a situation where the entire concept of rebates is considered anti-competitive.
The ruling could raise Intel’s profile with US regulators. Christine Varney, the woman in charge of antitrust policy at the Department of Justice, warned this week that government was no longer prepared to rely on the free market to keep anti-competitive behavior in check.
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