Multi-Billion-Dollar EU Fine Possible Against Intel - InformationWeek
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02:19 PM

Multi-Billion-Dollar EU Fine Possible Against Intel

Lawyers say the fine is likely to top the $1.36 billion the EU levied against Microsoft for anti-competitive practices.

The European Union this week could levy a multibillion-dollar fine against Intel, capping a nearly decade-long investigation of anti-competitive behavior.

The EU is expected to issue one of its heaviest penalties ever against Intel during the weekly commissioners' meeting Wednesday, the Financial Times reported. Lawyers told the newspaper that the fine is likely to top the $1.36 billion levied against Microsoft for its anti-competitive practices.

Intel declined comment Monday. "We have had no official notification from any authorities that a decision has been made," a company spokesman said. "So as far as we are concerned this is speculation and we will not comment."

The Intel case stems from a complaint filed in 2000 by rival Advanced Micro Devices, which accused the larger Intel of unfairly trying to shut AMD out of the market. The EU investigated numerous antitrust charges, including offering rebates on the condition that manufactures buy all or most of their processors from Intel, paying manufacturers to either delay or cancel product lines with AMD chips, and offering processors below cost in bids against AMD.

How EU regulators will handle the fine is not known. In theory, they could fine Intel as much as 10% of its annual worldwide revenue, which would amount to almost $4 billion, the Financial Times said. The EU, however, rarely levies the maximum.

The EU is not the only government to go after Intel for competing unfairly. Japan's Fair Trade Commission in 2005 ruled that Intel had abused its monopoly. Intel agreed to a cease-and-desist order but did not admit to any wrongdoing.

South Korea's Fair Trade Commission last June levied a $21 million fine against Intel for discounts offered to two Korean computer makers in an attempt to shut out AMD. Intel has appealed the fine.

In the United States, Intel is battling AMD in federal court in Delaware, where the latter company has filed an antitrust suit against Intel. Filed in March 2005, the suit has shown the intensity of competition between Intel and AMD, with each side having accused the other of trying to sway public opinion through media manipulation.

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