Intel whacked on the knuckles by EU

Anti-competitive practices cost Intel billions, while AMD smirks quietly in the background.

The verdict is in, and Intel has been found guilty as charged by the EU for abusing its dominant market position, with the chipmaker being fined a whopping €1.06 billion (that's 2.8 billion Aussie dollars, by the way).

The EU said Intel had violated EC Treaty antitrust rules under Article 82, abusing its dominant market position "by engaging in illegal anticompetitive practices to exclude competitors from the market for computer chips called x86 central processing units (CPUs)".

The EU Commission said it had found Intel guilty of two kinds of nefarious illegal practice, the first of which was giving "wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel", whilst the second was Intel's direct pay-offs to OEMs to stop or delay the launches of products containing its competitors' chips.

The commission said it also found Intel guilty of making "direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs," saying that these moves "effectively prevented customers - and ultimately consumers - from choosing alternative products."

"By undermining its competitors' ability to compete on the merits of their products, Intel's actions undermined competition and innovation" said a Commission press release.

Along with the €1.06 billion fine, Intel has been ordered to stop its antitrust behavior immediately and told the Commission will actively monitor its compliance. The fine is equivalent to $1.44 billion, a very hard whack to Intel's bottom line, considering the firm had $3.5 billion in cash on its balance sheet at the end of Q1.

Giuliano Meroni, AMD's EMEA president, told us "The EU decision will shift the power from an abusive monopolist to computer makers, retailers and above all consumers".