Intel fined $1.45 billion in Europe

This is huge — in a complaint filed by AMD to the European Commission, Intel was found in violation of anti-trust rules in Europe. The EU demands that Intel stop its unethical business practices and pay a fine of $1.145PHP 67INR 97EUR 1CNY 8 billion.

The commission states that Intel was playing an unfair game against competitors, namely AMD.

… Intel paid computer makers to postpone or cancel plans to launch products that used AMD chips, paid illegal, secret rebates so computer makers would use mostly or entirely Intel chips, and paid a major retailer to stock only computers with its chips.

Europe has been known to be very vigilant/strict against multi-national companies. Before this $1.45PHP 85INR 123EUR 1CNY 11 billion ruling, Microsoft was fined about $680PHP 39,906INR 57,630EUR 648CNY 4,949 million for similar anti-trust cases years back.

Intel Corporation president and CEO Paul Otellini denies this ruling and says they will file an appeal.

Last quarter, Intel made a net income of $647PHP 37,970INR 54,833EUR 616CNY 4,709 million from reported revenues of $7.1PHP 417INR 602EUR 7CNY 52 billion. If the fine sticks, it could totally wipe out Intel’s income for the rest of the year.

{ via Canada.com and Earth Times }

Update: AMD sent out a press statement:

“After an exhaustive investigation, the EU came to one conclusion – Intel broke the law and consumers were hurt,” said Tom McCoy, AMD executive vice president for legal affairs. “With this ruling, the industry will benefit from an end to Intel’s monopoly-inflated pricing and European consumers will enjoy greater choice, value and innovation.”

The EC decision stated specifically that:

• “Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel”.
• “Intel made payments to major retailer Media Saturn Holding from October 2002 to December 2007 on condition that it exclusively sold Intel-based PCs in all countries in which Media Saturn Holding is active.“
• Intel “interfered directly in the relations between computer manufacturers and AMD. Intel awarded computer manufacturers payments – unrelated to any particular purchases from Intel – on condition that these computer manufacturers postponed or cancelled the launch of specific AMD-based products.”