Intel to Face EU Fine on Wednesday

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.

  • rcarm
    Is the EU gonna give AMD some of that money?
  • randomizer
    rcarmIs the EU gonna give AMD some of that money?Na, this is part of their "stimulus package". AMD will have to sue Intel themselves to get a cut.
  • soky602
    Not sure if I understand totally, but does that mean Intel aren't allowed to sell their chips cheap to make us happy?
  • spazoid
    "The European Commission said Intel’s pricing practices were an attempt to drive AMD out of the market"

    Welcome to the free market! Or not. I will never be able to understand why any non-private organisation can hand out fines or other penalties to private companies for being competitive.

    Intel wants to make money. They'll make more money if AMD goes bankrupt. The consumer doesn't win, but the market does.

    There is no such thing as a regulated free market. EU, you have to pick which you desire the most.
  • sandmanwn
    Seems silly that EU courts are involved in a spat between two US based companies, especially handing out fines.

    They should make a ruling but enforce no penalties. The ruling should do nothing more than give AMD the opportunity to file a claim for compensation.

    The EU benefiting looks like nothing more than government sticking its hand in the US cookie jar.
  • blackened144
    If the EU was giving this money directly to the company that was affected, then I wouldnt have much of a problem with it. The problem I have with this is that the EU is going to fine them $1.3b and keep it for the EU. They dont care one iota about "illegal rebates", this is purely a grab for money. Also how come we dont hear anything about the retailers who accepted these "illegal rebates"? Could it be because they are European companys whose pockets are not too deep?
  • apache_lives
    get over it EU
  • erdinger
    Dear Americans, Amd is not a American company. The main seat of Amd is in Germany Dresden, where a big factury is also seated. (or was)

    This makes the whole thing a Euro-American topic. Since the American company Intel acted illegaly, damaging an European Company (Amd), and thereby neglected European law, they have to pay for it.

    Some of the money already reached Amd because Amd got money from the German state.

    So please don't complain about Europe taking away American money, because it's an American company which tries to outcompete a European company with illegal actions!

  • sublifer
    soky602Not sure if I understand totally, but does that mean Intel aren't allowed to sell their chips cheap to make us happy?No, Intel was effectively paying the retailers and manufacturers to buy and use their processors. Most of that would not have been passed on to the customers although there's a chance it could have.
  • zaratustra06
    No market is completly free and should not be completly free. That is why all countries have anti-mopolistic laws.