On Wednesday, the European Commission fined Intel a record 1.06 billion Euros (US$1.44 billion) for anticompetitive behavior. Intel said it will appeal.
The EC said the U.S.-based chipmaker gave discounts and payments to European computer manufacturers to use Intel’s processors and prevent them from going to archrival Advanced Micro Devices. The investigation began in 2000.
Intel general counsel Bruce Sewell told Dow Jones Newswires, “We completely disagree” with the EU’s findings. Intel denied paying manufacturers not to buy AMD products or require them not to buy AMD chips to obtain a rebate.
“There’s been an evolution in antitrust law and how rebates are to be conducted by dominant companies. We see a line of thought coming mainly from the European Commission — but also in Korea and Japan — that rebates can be anticompetitive,” Sewell told journalists. “Antitrust agencies are testing the boundaries of the law.”
South Korea and Japan have also cited Intel for its marketing methods. Intel is appealing a $25 million fine in Korea and Sewell said the company has settled with Japanese officials.
An appeal of the EC decision could take several years.
A Market Heavyweight
The EC said Intel’s rebates were conditional on a computer manufacturer buying Intel chips nearly exclusively. It also said it had proof that Intel paid European manufacturers to postpone the launch of computers with AMD chips.
Sewell insisted Intel only provides one kind of rebate.
Antitrust lawyer Thomas Vinje of Clifford Chance in Brussels, Belgium, said the EC stuck closely to existing case law against rebates used to lock in market share. He added that the only way Intel can win is if the EC is wrong about the facts.
Thomas Graf of Cleary, Steen & Hamilton LLP noted that Intel has generated large revenues in the European market, setting the stage for the record fine. He added that the…