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 $1.145 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 $1.45 billion ruling, Microsoft was fined about $680 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 $647 million from reported revenues of $7.1 billion. If the fine sticks, it could totally wipe out Intel’s income for the rest of the year.
Update: AMD sent out a press statement:
â€œAfter an exhaustive investigation, the EU came to one conclusion â€“ Intel broke the law and consumers were hurt,â€ said Tom McCoy, AMD executive vice president for legal affairs. â€œWith 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.â€
The EC decision stated specifically that:
- â€œIntel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intelâ€.
- â€œIntel 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.â€œ
- Intel â€œinterfered 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.â€