EU expected to fine Intel for anti-competitiveness

Written by Tim Smalley

May 11, 2009 | 11:44

Tags: #anti-competitive #antitrust #anti-trust #business #ec #fine #guilty #practices

Companies: #amd #eu #europe #european-commission #intel

The European Union antitrust regulators are expected to rule this week that Intel illegally paid computer manufacturers to postpone the launch of AMD-based products.

It's expected that the European Commission will reveal its decision to fine Intel on Wednesday and order the company to change its business practices, which the EU believes have been illegal for a period stretching back eight years.

There has been no information on how big the fine might be, but the largest fine levied by the EU was against Microsoft in 2004, where the Commission demanded €497 million (£447 million) for the company's anti-competitive practices.

According to Reuters, the EC is expected to find Intel guilty of anti-competitive practices on two counts. The first violation will say that Intel gave rebates to computer manufacturers to obtain exclusivity or to restrict the use of competing chips from AMD and that it provided other incentives to retailers who chose to sell only Intel-based machines.

The second finding will state that Intel paid PC manufacturers to delay or scrap the launch of AMD-based products and that these payments have restricted competition in the market.

These violations allowed Intel to set the percentages of the market that it wanted to control. For example, NEC was told that 20 percent of its desktop and notebook machines could be AMD-based, while all Lenovo notebooks (and relevant Dell products) had to use Intel chips. 95 percent of HP's business desktop machines had to be Intel-based.

The Commission will order Intel to end those rebates and incentive programmes which it deems illegal by a specific date. Both Intel and the European Commission declined to comment on the rumours, and Intel has repeatedly said that it has done nothing wrong. We'll have to wait until Wednesday to find out if Intel will be fined for anti-competitive business practices.

Do you think it's the right decision and, if so, how much do you think Intel will be fined? Let us know your thoughts in the forums.
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