Intel loses bid to quash $1.4B EU antitrust fine

Intel CES 2013

A European court has upheld a €1.06 billion ($1.43 billion) antitrust fine that the European Commission levied on Intel 5 years ago. The fine – the largest ever imposed on one company by the EU — was for Intel’s anticompetitive approach to dealing with major manufacturers and European electronics retailers.

The chip firm gave kickbacks to German retail giant Media-Saturn for not stocking PCs using processors from its much smaller x86 architecture rival, AMD. It did the same with manufacturers Dell, H, NEC and Lenovo in exchange for them almost exclusively using Intel chips, and to HP, Acer and Lenovo for scrapping or stalling plans to launch AMD-based products. Because Intel was (and is) dominant in the x86 market, all of this constituted straight-up antitrust abuse.

The General Court in Luxembourg – part of the Court of Justice of the European Union – ruled on Thursday that the Commission had correctly demonstrated the existence of the conditional rebates and “naked restrictions” that Intel had used, that Intel had tried to conceal what it was doing, that these practices were illegal, and that the fine was appropriate.

“The judgment is significant because it confirms that the Commission was fully justified in pursuing the anticompetitive conduct in question in a major worldwide market,” the Commission said in a statement. Intel can still appeal to the European Court of Justice.

Intel had tried to argue that the fine, which was equivalent to 4.8 percent of its 2008 turnover, was disproportionate. The maximum antitrust fine the European Commission can impose is 10 percent of annual turnover.

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