EU issues a record $1.45B fine to Intel over sales tactics

Tom McCoy, AMD's executive vice president for legal affairs, said the ruling would bring consumers "greater choice, value and innovation."

Regulators said Intel also paid Germany's biggest electronics retailer, Media Saturn Holding, from 2002 to 2007 to stock only Intel-based computers at its MediaMarkt superstores, even in Dresden, Germany, where many AMD chips are made.

The decision does not affect Intel's pricing strategy outside Europe. But it could have an important effect in the United States and in Asia.

This week, one of the top U.S. antitrust officials, Christine Varney, signaled a return to trustbusting as the Obama administration dropped a strict interpretation of antitrust rules that saw regulators shun major action against alleged monopolies during the Bush years.

Kroes said Varney's words gave her hope that the EU's current "close cooperation" and information exchanges with the Federal Trade Commission "could go in a very positive way" in the future. The Federal Trade Commission upgraded a probe into Intel last year.

"The more competition authorities are joining us in our philosophy, the better it is for it is a global world," she said. "The more who are doing the job ... and with the same approach then the better it is."

Intel's Sewell said the concept that rebates could damage competition is an area "where the law is now in flux" and regulators were testing the boundaries.

"There is a line of thought developing primarily out of the European antitrust authorities but also perhaps being picked up by the Japanese and the Koreans that suggest that rebates can be anti-competitive," he said.

EU regulators said they calculated Intel's fine — 4% of last year's $37.6 billion in worldwide sales — on the value of its European chip sales over the five years and three months that it broke the law. Europeans buy some 30% of all computer chips sold every year.

The EU could have gone even higher. EU antitrust rules allow for a fine of up to 10% of a company's annual global revenue for each year of bad behavior.

The EU said the fine must be paid within three months. The money eventually goes into the EU budget, reducing the funding it seeks from European taxpayers.

European consumers group BEUC welcomed the fine and urged customers to seek damages in civil courts.

The EU said rebates like the ones Intel offered PC makers, with discounts for large orders, are illegal when a monopoly company makes them conditional on buying less of a rival's products or not buying them at all. EU officials said the discounts were so steep that only a competitor that sold chips for less than they cost to make would have any chance of grabbing customers.

According to regulators, AMD offered 1 million free chips to one manufacturer, but it ultimately could only accept 160,000 to avoid losing a rebate on many millions of other chips from Intel.

The Associated Press contributed to this report.

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