The EU(European Commisioan) fined Intel, the giant chipmaker for $1.45billion on Wednesday and ordered it to halt the the illegal rebates and other illegal practices to squeeze out the rival Advanced Micro Devices Inc(AMD).
Though Intel said it would appeal against the fine, but the decision reminds of the once fearful fine the EU imposed on Microsoft for similar monopoly practices. The huge fine from EU is the largest ever for a single corporation exceeding an 896-million euro penalty last year against glass maker Saint-Gobainand the 497-million euro fine on Microsoft.
Intel President and CEO Paul Otellini said that Intel would appeal at Europe’s Court of first Instance. He told in a statement “Intel takes exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor market.”
The markets didnt react much and Intels Stocks rose+2.70% at 13.05.
European Union Competition Commissioner Neelie Kroes said in a news briefing, “Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. If we smell that there is something rotten in the state, we act.”
The EU told Intel to stop the problematic rebated, discount, concessions. The fines account to almost a fifth of the $7.79 billion cash on Intel’s balance sheet.
EU accused the Santa Clara based company of giving rebates to computer manufacturers such as Acer, Hewlet Packard Co., Dell Inc., Lenovo Group and the NEC Corp.
The commision said the company must pay the fine within three months from the date of notification.
