Computer chipmaker Intel has been fined a record 1.06bn euros ($1.45bn; £948m) by the European Commission for anti-competitive practices.
EU Competition Commissioner Neelie Kroes says Intel 'took advantage of their position'. Ms Kroes joked in her own news conference that Intel would now have to change its latest advertising slogan from "sponsors of tomorrow" to "the sponsor of the European taxpayer".
The Commission found that between 2002 and 2007, Intel had paid manufacturers and retailers to favour its chips over those of Advanced Micro Devices (AMD).
The Commission said that personal computer makers Acer, Dell, HP, Lenovo and NEC had all been given hidden rebates if they only used Intel chips.
Media Saturn, which owns Europe's biggest consumer electronics retailer Media Markt, had been given money so that it would only sell computers containing Intel chips.
"Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years," said Competition Commissioner Neelie Kroes.
Intel's President and CEO Paul Otellini says "Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal."
The Commission has also ordered Intel "to cease the illegal practices immediately to the extent that they are still ongoing".
The EU said the fine must be paid within three months. The money eventually goes into the EU budget, reducing the funding it seeks from European taxpayers.
Intel responded by stating that "We do not believe our practices violated European law. The natural result of a competitive market with only two major suppliers is that when one company wins sales, the other does not. The Directorate General for Competition of the Commission ignored or refused to obtain significant evidence that contradicts the assertions in this decision. We believe this evidence shows that when companies perform well the market rewards them, when they don't perform the market acts accordingly."
EU regulators said they calculated Intel's fine – 4 per cent of last year's $37.6 billion (U.S.) in worldwide sales – on the value of its European chip sales over the five years and three months that it allegedly broke the law. Europeans buy some 30 per cent of all computer chips sold every year.
DARC CommentIntel has been under investigation for their anti-competitive business practice by Asian and European trade commissions alike. Only when proper evidence is gathered does the US trade commission plan any action, if at all.
The European trade commission ruling will have little effect on Intel's business practices, since they feel their marketing model is immune to sanction. It would be interesting to see what the industry's response is. Will AMD begin to win market share in large retail stores, or will Intel still dominate with immunity.
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