The European Union is expected to impose heavy fines on chip maker, Intel this week, according to reports.
Early in March we reported that Intel could be facing fines from the European Union in relation to the company’s pricing model. It seems the European Union has a big problem with the way Intel has been doing business, in particular rebates to computer makers and retailers. The European Commission said Intel’s pricing practices were an attempt to drive AMD out of the market and was set to rule on whether or not the company should be fined.
Citing people familiar with the matter, the Wall Street Journal said the EU on Wednesday will fine the world's biggest computer-chip maker for breaking antitrust rules. WSJ reports that once all the stakeholders have had their say on the fine, the final document will be presented to the college of commissioners Wednesday, which is then likely to adopt it.
As we reported last week, the EU can impose of up to 10 percent of a company’s annual revenue. Intel’s revenue for 2008 was $38 billion, however, legal experts told the New York Times that Intel’s fine could reach roughly €1 billion, or $1.3 billion.
It’s not yet clear as to whether or not the European Commission will impose new rules in order to remedy Intel's actions. Former Commission official Michael Tscherny hinted at just that last month when he spoke to Reuters and said the European Commission could destroy Intel’s pricing model.
We’ll keep you posted on this one, and update on Wednesday or as soon as anything develops.