Intel fined 1.45 billion by the EU for anti-competitive practices; will appeal decision

Intel faces a record 1.45 billion fine imposed by the EU on Tuesday for alleged anti-competitive practices designed to muscle its rival AMD out of the chipset market in Europe. The eight-year investigation into the company began in 2001 after AMD filed a complaint about Intel the year prior. Results of the EU investigation reveals that Intel used its dominant financial position to pay computer manufacturers Acer, Dell, HP, Lenovo, and NEC as well as smaller retailers to postpone, cancel or avoid using and/or selling AMD products. Neelie Kroes, the Europen Union competition commissioner, further added that Intel “went to great lengths to cover up its anti-competitive actions.” The EU ordered Intel to immediately cease its anti-competitive practices and pay the hefty fine, though the amount would be held in a bank account, during the ensuing appeal process. As expected, Intel responded on Wednesday denying the allegations and vowing to appeal both the financial award and the order to change its practices. In its statement, Intel agreed to abide by the EU’s decision during the appeal process. Hit the jump for the full text of Intel’s rebuttal.

SANTA CLARA, Calif., May 13, 2009 – Paul Otellini, Intel Corporation president and CEO today issued the following statement regarding the European Commission decision on Intel’s business practices:

“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.”

More information about Intel and “Competition in the Innovation Economy” is available at www.intel.com/pressroom/legal.

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