Intel to Argue $1.45B European Antitrust Fine
Intel officials will argue this summer that regulators had not proven that Intel’s business practices were anti-competitive, and that the fine levied was unfair.
Intel executives will appeal the $1.45 billion antitrust fine levied by the European Commission three years ago for what regulators said were anti-competitive behaviors aimed at limiting systems makers' use of chips from rival Advanced Micro Devices.
During a four-day hearing scheduled for June in Luxembourg, Intel executives will argue that the EC, the antitrust arm of the European Union, failed to prove that the giant chip maker unlawfully hindered AMDs abilities to do business, and that the finethe largest ever levied by the commissionwas manifestly disproportionate with other fines levied by the EC.
According to Reuters, the fine represented 4.15 percent of Intels 2008 revenues.
The $1.45 billion fine, which was levied in May 2009, followed an eight-year investigation by the EC, and was among a number of investigations by regulators in the United States and elsewhere into Intels business practices and accusations that it leveraged its dominant market presence and financial power to persuade OEMs, including Dell and Hewlett-Packard, to limit their use of AMD processors. The result was an environment where prices were kept unnecessarily high, innovation stunted and competition thwarted, harming consumers, the EC said.
According to EC officials, this was done through the use of rebates and direct payments to the systems makers.
Intel officials denied the allegations and promised to appeal. They argued that while the company was aggressive in its marketing and sales, those practices were not illegal or anti-competitive.
Intel found an ally in the ECs ombudsman, who in November 2009 criticized the commission for improperly recording a meeting with a Dell executive during the course of its investigation. The ombudsman accused the European regulators of maladministration.
The EC disagreed with the ombudsmans findings.
The European regulators investigation was one of a number of probes at the time into Intels business practices, with similar accusations of payoffs to OEMs to limit their use of products from AMD, as well as from graphics chip maker Nvidia. The U.S. Federal Trade Commission (FTC) also accused Intel of altering some of its technologies to hamper the performance of products from AMD and other vendors.
Intel and the various regulators and rivals settled the legal disputes, though Intel executives remained firm that they had not violated any laws. Intel and AMD in November 2009 settled their lawsuits, with Intel paying AMD $1.25 billion and agreeing to a set of business practice provisions.
In August 2010, Intel and the FTC settled their lawsuit, with the two sides agreeing that Intel could not use its market dominance and money to hamper competition. In addition, the chip maker in February settled with the New York State Attorney Generals Office. The settlement included a $6.5 million payment from Intel to cover some of the governments costs related to the litigation.