Intel Faces Hefty Fine from European Commission
Intel may be facing a hefty fine and a change in business practices. The chipmaker was accused of being anticompetitive after allegedly offering discounts to European computer manufacturers who purchased Intel’s processors instead of chips from archrival Advanced Micro Devices.
The executive arm of the European Union, the European Commission, is expected to approve a $1.36 billion fine against Intel Wednesday and issue a cease-and-desist order stopping Intel from continuing with the alleged business practices.
The investigation has been going on since 2000,” said Chuck Mulloy, Intel’s spokesperson. “We’ve seen the rumors and speculation regarding an impending decision from Brussels. Unfortunately, we have nothing official from the commission, so we can’t comment at this stage.”
Mulloy did, however, comment on the allegations against the company, “We’ve said many times we believe our business practices are fair and lawful to the benefit of consumers.”
Long Time Coming
Sunnyvale, Calif.-based AMD’s first allegations about Intel’s practices came in 2000, but it wasn’t until summer 2007 that Intel was officially fined for its discounts.
AMD has a good case against Intel, according to an antitrust lawyer in Brussels, Belgium.
“Yes, I think all the indications we have seen suggests that there will be a significant fine for Intel’s infringement, and that is the fact of a number of things,” said Thomas Graf of Cleary, Steen & Hamilton LLP, the law firm representing several companies required to provide information to the commission. “One is the infringement the commission has identified has been long-lasting and the market, which is at issue here, is a market where Intel generates a large revenue. This creates the basis for very high fines.”
What is interesting, according to Graf, is that the commission for the first time is applying a more ethics-based approach to discounts.
In the past the commission has treated discounts as infringement and…
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