Intel set to appeal EC's $1.44B antitrust fine

The substantial fine "amounts to about $23 for every CPU sold in Europe last year"

Intel Corp. said it plans to appeal last week's European Commission decision to fine the company for violating antitrust laws.

The EC found Intel guilty of paying rebates to computer manufacturers and to Europe's largest IT retailer, Media Markt, in order to keep systems based on chips from rival Advanced Micro Devices Inc. off of store shelves. Although the rebates did result in lower retail prices for PCs, EC Competition Commissioner Neelie Kroes contended that they left consumers without a choice of technologies.

Dean McCarron, an analyst at Mercury Research, noted that the substantial fine "amounts to about $23 for every CPU sold in Europe last year."

During a hastily arranged press conference, Intel CEO Paul Otellini argued that the EC "ignored or disregarded" evidence "refuting" the antitrust charges. "There were a number of documents from OEMs or between Intel and OEMs that refute what was claimed here," he said.

Otellini disputed a key EC allegation: that Intel paid "conditional" rebates to PC makers to prevent them from purchasing chips from competitors. The EC "alleged exclusive deals but couldn't find them, so it said we must have hidden ," he said, adding that the EC "got all of the documents that they wanted . . . so I'm really baffled."

Michael Cooper, an antitrust attorney at Bryan Cave LLC, criticized the EC's decision. "It is hardly clear that the EU's action will benefit consumers. The consumer rarely benefits when enforcers take actions to protect less-efficient firms from the rigors of competition."

Kroes said the antitrust action will protect consumers. "Intel has harmed millions of EU consumers," so the large fine -- the largest antitrust penalty the EC has ever levied against a single company -- should "come as no surprise," she said.

If Intel fails in its appeal, McCarron said the company's pricing structure could become "less complicated," with no more rebates.

This version of the story originally appeared in Computerworld 's print edition.

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Eric Lai with Paul Meller

Computerworld (US)
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