Intel Could Face 1.3 Billion in Fines at the Hands of the European Union

Posted 05/02/2009 at 5:14pm | by Justin Kerr

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Let it not be said that the European Union is playing favorites when it picks on Microsoft. The powerful antitrust regulators have now set their sights squarely on Intel, and the fines could be much worse. The commission began investigating Intel’s sales practices in late 2000 when AMD filed its initial complaint. Both chip makers are US based, but European regulators are historically much more aggressive at punishing monopolistic behavior than their American counterparts.

The chip maker has allegedly been accused of giving large rebates to computer manufacturers and retail chains to carry Intel exclusively, or in some cases, to downplay the AMD offerings. In some situations, Intel is even accused of offering server chips below cost to help corner the market. Intel denied any wrong doing and according to Intel spokesmen Robert Manetta, “Over all, Intel’s conduct is lawful, pro-competitive and beneficial to consumers.” Intel has every right to be concerned over the investigation however, since the fines imposed are rumored to dwarf those faced by Microsoft. In the 2004 EU antitrust verdict against Microsoft, the software giant faced a fine of close to $663 million US. Intel on the other hand could be facing a penalty of $1.3 billion or more according to experts.

Intel currently controls around 81.9 percent of the global market for CPU’s, while AMD scrapes by with only 17.7 percent. A guilty ruling could put Intel into further hot water after being found guilty of anti competitive practices in South Korea less than a year ago. They are appealing the $19.5 million fine, but this is chump change compared to the $3.6 billion penalty the European union is capable of leveling.

Is Intel abusing it’s power?