Intel EU Antitrust Fines Could be Huge, Rumored This Week

Chipmaker Advanced Micro Devices' (AMD) complaint to the European Commission (EC) about its competitor's practice of encouraging retailers to sell their own processors has ended with a significant fine against defendant Intel. The ruling is expected later this week.

Back in 2001, AMD filed complaint against Intel, claiming that its rival in the x86 microprocessor market had violated antitrust law by pushing retailers to sell its own hardware over AMD-based computers. Intel did so through retroactive rebates that ultimately saved retailers and customers cash -- but according to AMD, it came at the expense of fair competition. The claim by AMD was under investigation for six years before formal charges laid by the European Union executive were made in 2007. (Source: crn.com)

Note: The European Commission (formally the Commission of the European Communities) is the executive branch of the European Union (EU). (Source: wikipedia.org)

EC Raids Intel Office in 2008

In the time since, AMD has added more complaints, claiming that Intel even went so far as to pay retailers outright for keeping its rivals' hardware off shelves.

Although slow to action, the EC took dramatic steps when it raided Intel's offices in Germany early in 2008. It followed those forays with similar investigative invasions of Intel retail partners. The actions culminated in a five hundred page report describing the European Commission's findings against Intel, which in the time since 2008 have been shared with antitrust authorities in 27 European Union countries.

EC Fine Could be Significant

Intel remains mum on the imminent fine, which should be formally announced when the European Union executive sits down for its weekly meeting on May 13.

"Our policy is not to comment on rumors and speculations. We are not part of that process, so we have no comment," said Chuck Molloy, Intel's legal spokesperson. AMD has also refused to comment.

It's not yet known what kind of fine Intel will receive, but most feel it will be heavy. It could even reach as high as 10 per cent of the company's total annual revenue, which was $37.6 billion in 2008. A more likely fine should be closer to that levied against Microsoft in 2004, totaling some $655 million. (Source: reuters.com)