Skip to main content

Intel Facing Huge Fines from European Union

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.

The New York Times today reports that the size of that penalty is to be discussed by representatives from 27 European Union governments in early May. However, we wouldn’t be so jacked up about the money itself. Sure, it could be the EU’s biggest fine handed out ever, but previous reports suggest that the maximum fine allowed would be 10 percent of Intel’s revenue, which while unpleasant, wouldn’t exactly clean the company out. The New York Times cites legal experts as saying Intel’s fine could reach roughly €1 billion, or $1.3 billion. Intel’s annual sales were $37.6 billion in 2008. However, there is a distinct possibility that the EU could 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.

Intel denies charges related to rebates offered as long as manufacturers agreed to obtain the majority of their processors from Intel as well as paying them to either to delay or cancel the launch of AMD based products. The company maintains that its actions were within legal boundaries.

Related Links

Tom's Hardware


New York Times