Intel found itself slapped with a hefty 376 million euro ($400 million) fine as a consequence of an EU antitrust case rooted in the U.S. chipmaker’s anti-competitive practices dating back nearly two decades. These practices were aimed at obstructing rival companies.
While certain aspects of Intel’s actions, such as concealed rebates, were dismissed on appeal due to insufficient evidence of harm, the European Union Commission maintained its position that Intel engaged in payments to PC manufacturers with the intention of delaying or constraining the use of AMD processors in their products.
Back in 2009, Intel initially faced a substantial fine of 1.06 billion euros for its misconduct and related practices. However, last year, the General Court in Luxembourg, Europe’s second-highest court, overturned this fine. Nevertheless, the General Court did agree with the European Commission’s assertion that Intel had unlawfully marginalized competitors in the market, prompting the EU antitrust watchdog to reopen the case.
In the 2009 ruling, Intel was accused of hindering its rival, Advanced Micro Devices (AMD).
The EU watchdog announced the reinstatement of a fine for practices occurring between November 2002 and December 2006. The Commission provided examples, including instances where Intel made payments to HP to dissuade the sale of AMD-powered business PCs to small and medium-sized businesses through direct channels from 2002 to 2005. Additionally, Intel paid Acer to delay the launch of an AMD-based notebook from late 2003 to early 2004 and similarly paid Lenovo to postpone the release of AMD notebooks by six months.
According to the General Court’s findings, Intel’s imposition of these conditions on payments allowed the company to restrict the competitive challenge posed by AMD desktops in crucial market segments.
The European Commission stated that the newly imposed fine of €376 million reflects Intel’s actions in hindering the development and growth of its primary competitors in the x86 CPU market for nearly five years.
“The General Court confirmed that Intel’s naked restrictions amounted to an abuse of dominant market position under EU competition rules,” the European Commission said in a statement. “As a result of those restrictions, computer manufacturers halted, delayed, or placed restrictions on the commercialization of products based on a competitor’s chipsets, which they had actively planned and for which there was consumer demand.”
The Commission contended that Intel’s naked restrictions had a detrimental effect on market competition, depriving customers of choices they would have otherwise had.
Currently, Intel is awaiting the Commission’s approval for nearly 10 billion euros in German state subsidies to establish a chipmaking facility in Germany. The company stated that it is assessing the ruling to decide whether to appeal or not.
“We are analyzing the decision and the amount of the fine to determine the possible grounds and prospects of success of an appeal to the European Courts,” the company said in a statement.
While Intel did not appeal the €376 million fine, it’s worth noting that there is still the possibility of additional fines if the appeal court ultimately determines that the conditional rebates offered by Intel also violated competition laws.
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