On Friday, Intel received a 376 million euro ($400 million) fine as a result of an EU antitrust case. This case originated from the U.S. chipmaker’s anti-competitive actions nearly two decades ago, aimed at obstructing rival companies.
Although certain aspects of Intel’s actions, such as concealed rebates, were dismissed on appeal due to insufficient evidence of harm, the European Union Commission maintained its stance that Intel engaged in payments to PC manufacturers with the intention of postponing or constraining the use of AMD processors in their products.
In 2009, Intel initially faced a substantial fine of 1.06 billion euros for its misconduct and related practices. However, this fine was overturned last year by the General Court in Luxembourg, which is Europe’s second-highest court.
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Nevertheless, the General Court did concur with the European Commission’s assertion that Intel had unlawfully marginalized competitors in the market. This agreement prompted the EU antitrust watchdog to re-open the case.
In the 2009 ruling, Intel was accused of obstructing its rival, Advanced Micro Devices (AMD).
On Friday, the EU watchdog announced the re-imposition of a fine for practices that occurred between November 2002 and December 2006.
The Commission provided examples, including instances where Intel made payments to HP to discourage the sale of AMD-powered business PCs to small and medium-sized businesses through direct channels from 2002 to 2005.
Additionally, Intel paid Acer to postpone the launch of an AMD-based notebook from late 2003 to early 2004 and similarly paid Lenovo to delay the release of AMD notebooks by six months.
According to the General Court’s findings, Intel’s imposition of these conditions on payments enabled the company to restrict the competitive challenge posed by AMD desktops in crucial market segments.
The European Commission stated that the newly imposed fine of €376 million reflects Intel’s actions in hindering the development and growth of its primary competitors in the x86 CPU market for nearly five years.
“The General Court confirmed that Intel’s naked restrictions amounted to an abuse of dominant market position under EU competition rules,” the European Commission said in a statement.
“As a result of those restrictions, computer manufacturers halted, delayed or placed restrictions on the commercialization of products based on a competitor’s chipsets, which they had actively planned and for which there was consumer demand,” the statement added.
The Commission said Intel’s naked restrictions therefore had a detrimental effect on competition in the market, by depriving customers of a choice which they would have otherwise had.
Intel, which is currently awaiting the Commission’s approval for nearly 10 billion euros in German state subsidies to build a chipmaking facility in Germany, said it’s analyzing the ruling to decide whether to appeal or not.
“We are analyzing the decision and the amount of the fine to determine the possible grounds and prospects of success of an appeal to the European Courts.,” the company said in a statement.
The European Commission has appealed against the other aspects of the General Court’s ruling from last year that pertain to the conditional rebates provided by Intel. This appeal has been filed at the EU Court of Justice, which is the highest court in Europe.
It’s worth noting that while Intel did not appeal the €376 million fine, there is still the possibility of additional fines if the appeal court ultimately determines that the conditional rebates offered by Intel also violated competition laws.
The €376 million fine stands as it is, but the outcome of the appeal regarding the rebates could potentially result in further penalties for the company.