Intel has been found guilty of anti-competitive behavior by European lawmakers, as rumors earlier this week suggested. The size of the fine—$1.45 billion—is the most astonishing among the punishments meted out to the chip-maker giant.
The European antitrust investigation concluded that Intel was guilty of abuses lasting more than five years, and had thereby been harming "millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years," said E.U. Competition Commissioner Neelie Kroes.
Intel must immediately cease any preferential rebates to PC manufacturers designed to make them favor Intel over rival CPU maker AMD, though it may still continue to offer normal business rebates within legal parameters.
The $1.45 billion fine is the largest ever levied by the E.U. against a single company, easily outclassing the $655 million Microsoft faced after a similar 2004 antitrust ruling. And it comes after some frantic last-minute lobbying from bodies like the Competitive Enterprise Institute to mitigate against E.U. action. According to the CEI's VP Wayne Crews, the E.U. could make Europe inhospitable "for innovation" by pursuing such rigorous antitrust policies, and it shouldn't "rejoice at this seeming triumph over American big business." Lobbying like that sounds somewhat ironic when looked at in the light of the U.S.'s highly litigious corporate atmosphere, and rings hollow when you look at Europe's high patents-per-capita statistics.
The E.U. deems that Intel was deliberately flexing its muscles to quash the business opportunities offered by a rival. On the playground there's a word for that: Bullying.
Intel's responded with the following statement:
"Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal."
"We do not believe our practices violated European law. The natural result of a competitive market with only two major suppliers is that when one company wins sales, the other does not. The Directorate General for Competition of the Commission ignored or refused to obtain significant evidence that contradicts the assertions in this decision. We believe this evidence shows that when companies perform well the market rewards them, when they don’t perform the market acts accordingly."
"Intel never sells products below cost. We have however, consistently invested in innovation, in manufacturing and in developing leadership technology. The result is that we can discount our products to compete in a highly competitive marketplace, passing along to consumers everywhere the efficiencies of being the world’s leading volume manufacturer of microprocessors."
"Despite our strongly held views, as we go through the appeals process we plan to work with the Commission to ensure we’re in compliance with their decision. Finally, there should be no doubt whatsoever that Intel will continue to invest in the products and technologies that provide Europe and the rest of the world the industry’s best performing processors at lower prices."