Intel expected to lose big in EU ruling

$1 billion fine could be slapped on Intel for offering rebates to computer makers that snub chips from competitors

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By  Vineetha Menon Published  May 11, 2009

EU antitrust regulators are expected to find Intel guilty of anti-competitive practices by offering discounts to computer manufacturers for using Intel chips as well as encouraging them not to use hardware from rival AMD.

The European Commission has been investigating the chip giant since the year 2000 for illegally paying off manufacturers to postpone and, in some cases, even cancel the launch of products made with its rival’s chips.

Now sources familiar with the case told Reuters that regulators are expected to announce on May 13th that Intel Corp has been found guilty and will be slapped with a fine for violating antitrust policies.

Intel is said to have offered rebates to computer makers to restrict or do away with the use of AMD chips and provided retailers with incentives to sell only machines with Intel CPUs. In its upcoming ruling, the Commission will order the company to end those rebates, which it deems to be illegal, by a specific date.

As an example, sources said that NEC Corp was told only 20% of its desktop and notebook products could have AMD chips. Additionally, all Lenovo notebooks and about 95% of all Hewlett-Packard's business had to use only chips from Intel.

The highest fine ever levied by the EU for such behaviour was the 2004 ruling against Microsoft, where the tech giant was fined $655 million after being found guilty of abusing its market dominance. Many predict that Intel will be hit with a much higher fine with speculation that it could exceed $1 billion.

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