European Commission Nails Intel with Record Setting $1.45 Billion Fine

Paul Lilly

The European Commission today told Intel it has to cough up $1.45 billion in fines, and it did so without the threat of sharks with fricken' lasers or blowing up the earth. Dr. Evil would be proud.

Intel stood accused of anticompetitive practices, allegedly offering large rebates to computer manufacturers and retail chains in exchange for snubbing rival chip maker AMD. Reports started trickling out earlier this week that Intel would be fined for its actions, with some savvy experts predicting it could be as high as $1.3 billion. While not quite as high, the 1.06 billion euros ($1.45 billion) the EC did settle on sets a new record, dwarfing the 476 million-euro fine it hit Microsoft with in 2004, also a new record at the time.

"Intel has harmed million of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years," European Union Competition Commissioner Neelie Kroes said.

In addition to the exorbitant fine, Intel was order to cease all illegal practices immediately, including halting illegal rebates.

Coming as no surprise, Intel CEO Paul Otellini said the company would appeal, taking its case to the Court of First Instance, the EU's second-highest court.

"Intel takes exception to this decision," Otellini said. "We believe the decision is wrong and ignores the reality of a highly competitive microprocceor market."

As for what effect the ruling would have on Intel, many analysts believe business will go on as usual and not to expect Intel to change the way it operates. However, this could be just the beginning. David Anderson, a lawyer at Berwin Leighton Paisner, pointed out Intel was "facing a wall of regulatory reistance to its business practices around the world" and could face antiturst infringement decisions in Japan, South Korea, and the EU.

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