A $1.45 billion fine from the European Union may not be the end of Intel’s financial pain on the continent. Competition lawyers have warned there’s a good chance that rival firms including AMD might now launch claims for damages against the company.

Intel was hit with the fine last week after EU officials ruled the firm had broken competition laws by offering bulk discounts in the form of rebates to chip buyers, but attaching unwritten conditions that limited how many chips those same buyers would get from rival Advanced Micro Devices.

Tech law Web site out-law.com notes that the money paid in the fine will go to the European Union itself rather than the companies affected by the illegal activity. Alan Davis, a lawyer from the firm which runs the site, says the EU ruling will “open the floodgates” to civil action and says that “without question” AMD will seek damages.

It might not just be AMD which goes to court. Intel was also accused of offering rebates so heavy that it was effective selling chips at below cost price, which can be illegal for a firm with a dominant market position. That would make it feasible that any firm selling chips could claim to have been damaged by Intel’s actions.

On the face of it, Intel would have a tough time defending itself against an AMD case dealing with the European market. It would likely have to play on the fact that there was no direct mention of the AMD-related conditions in its contracts with suppliers. If it lost a case, it would have to hope the damages were restricted to AMD’s proven losses and not extended to cover punitive damages.

However, Intel might have some breathing room. It’s planning to appeal against the EU verdict, a process which could take a couple of years. AMD may decide to be patient and wait until the appeal is settled before taking civil action rather than risk Intel lawyers throwing doubt on the validity of the EU claims.

An existing AMD lawsuit against Intel alleging similar anti-competitive behavior in the United States market, filed in 2005, is due to be heard next year. That case is not directly affected by the EU ruling.

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Entry was posted on Monday, May 18th, 2009 at 12:11 pm under Intel, Legal.

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