EU reinstates $400 million fine on Intel for blocking sales of competing chips

The European Union (EU) has once again slapped Intel with a hefty fine, this time totaling €376.36 million (around $400 million), as part of a long-standing antitrust battle. This particular chapter in the saga revolves around Intel’s alleged misconduct in blocking the sales of devices powered by rival x86 CPUs.

If we rewind a bit, back in 2009, the EU Commission imposed a jaw-dropping €1.06 billion (approximately $1.13 billion) fine on Intel, citing its misuse of its dominant position in the market. At that time, it was revealed that Intel had employed tactics such as offering hidden rebates and incentives to major manufacturers like HP, Dell, and Lenovo, effectively encouraging them to exclusively or predominantly use Intel processors. In some cases, Intel even dabbled in the art of persuasion by paying these manufacturers to delay or halt the release of products utilizing competitors’ CPUs. The Commission fittingly termed these actions as “naked restrictions.”

Fast forward to today, and this legal drama has taken quite the journey through European courts. Both sides have lodged appeals, depending on the court’s verdict. In 2017, the highest court in the European Union called for a re-examination of the fine, arguing that the Commission hadn’t sufficiently evaluated how Intel’s activities impacted the ability of its rivals to compete.

Subsequently, the General Court, Europe’s second highest judicial body, determined last year that the Commission did indeed falter in analyzing Intel’s rebate scheme. This led to the conclusion that it couldn’t precisely gauge the impact of Intel’s incentives on its competitors. Consequently, the €1.06 billion fine was scrapped, though the court upheld the decision that Intel’s “naked restrictions” violated EU laws.

The European Commission, in its recent announcement, cited specific instances where Intel allegedly hindered the sales of competing products. For instance, Intel purportedly paid HP to exclusively sell AMD-powered business desktops to small- and medium-sized enterprises via direct distribution channels from November 2002 to May 2005. Acer, too, was reportedly compensated to delay the launch of an AMD-based notebook from September 2003 to January 2004. Lenovo didn’t escape Intel’s influence, as the company allegedly received payments to postpone the release of AMD-based notebooks for a substantial six-month period.

It’s worth noting that while the Commission has appealed the General Court’s decision regarding the rebates offered by Intel, the company itself hasn’t contested the court’s ruling on “naked restrictions.” As a result, this part of the case has been firmly settled. In the words of the European Commission, “With today’s decision, the Commission has re-imposed a fine on Intel only for its naked restrictions practice.” This fine doesn’t pertain to Intel’s conditional rebates, which are still under appeal. Therefore, there’s a possibility that Intel may have to cough up more in fines down the road. The amount of the current fine, calculated based on parameters from the 2009 decision, reflects the narrower scope of the infringement compared to that earlier ruling. The legal battle continues, and the tech world watches closely as it unfolds.

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More about Antitrust Fine

• European Commission Press Release: The official press release from the European Commission regarding the fine imposed on Intel.

• Intel’s Response: Intel’s official response or statements related to the antitrust case and the fine.

• Background on the Intel Antitrust Case: A Reuters article providing background information on the Intel antitrust case and its developments.

• EU Antitrust Laws: Information about the EU’s antitrust laws and regulations, which govern cases like this one.

• Intel’s Market Dominance: An article discussing Intel’s historical market dominance and the antitrust issues it has faced over the years.