Intel to Change “Sponsors of Tomorrow” Slogan to “Sponsors of the European Union”
by John Paczkowski
Posted on May 13, 2009 at 3:59 AM PT
Ouch.
European regulators slapped Intel with an antitrust fine and, as expected, it’s a large one–a record $1.45 billion, which dwarfs even the $1.2 billion fine levied against Microsoft in 2008. The largest ever assessed for monopoly abuse, the fine follows charges that Intel (INTC) abused its market dominance by illegally inducing PC manufacturers to use its chips over those of rival AMD (AMD).
“The Commission finds that Intel did not compete fairly, frustrating innovation and reducing consumer welfare in the process,” Neelie Kroes, the European Commissioner for Competition Policy, said at a news conference announcing the fine. “Given that Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for over five years, the size of the fine should come as no surprise.”
And after all, it could have been worse. The $1.45 billion assessment is quite a bit less than the maximum fine the EC could have levied–10 percent of a company’s annual revenue. Given that Intel made $37.6 billion in 2008, the EC could have slapped it with a penalty of $4 billion.
Intel denied any wrongdoing and said it would appeal. “Intel takes strong exception to this decision,” CEO Paul Otellini said in a statement released immediately after the announcement. “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.”
Comments
Wow. Where do they get off fining a business that heavily during an economic downturn? That fee is ridiculously high. You know who is going to pay that fine? Employees and consumers of intel.
Posted by Bjorn Tipling at May 13th, 2009 at 9:03 am