Thursday, May 14, 2009

EU Slaps Intel With $1.44B Fine In Antitrust Case

The European Commission concluded their ongoing investigation on Wednesday finding Intel guilty of antitrust violations in the market for PC CPUs fining the company a record amount of $1.44 billion. The Commission also ordered Intel to stop illegal sales tactics that have shut out Silicon Valley rival Advanced Micro Devices Inc.

Intel president and CEO Paul Otellini issued the following statement regarding the EC decision on Intel's business practices:

"Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive processor marketplace characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal."

"We do not believe our practices violated European law. The natural result of a competitive market with only two major suppliers is that when one company wins sales, the other does not. The Directorate General for Competition of the Commission ignored or refused to obtain significant evidence that contradicts the assertions in this decision. We believe this evidence shows that when companies perform well the market rewards them, when they do not perform the market acts accordingly."

"Intel never sells products below cost. We have however, consistently invested in innovation, in manufacturing and in developing leadership technology. The result is that we can discount our products to compete in a highly competitive marketplace, passing along to consumers everywhere the efficiencies of being the world's leading volume manufacturer of processors."

"Despite our strongly held views, as we go through the appeals process we plan to work with the Commission to ensure we are in compliance with their decision."

AMD president and CEO Dirk Meyer was also quick to comment on the decision saying, "Today's ruling is an important step toward establishing a truly competitive market and AMD has consistently been a technology innovation leader and we are looking forward to the move from a world in which Intel ruled, to one which is ruled by customers."

"After an exhaustive investigation, the EU came to one conclusion – Intel broke the law and consumers were hurt," said Tom McCoy, AMD executive vice president for legal affairs. "With this ruling, the industry will benefit from an end to Intel's monopoly-inflated pricing and European consumers will enjoy greater choice, value and innovation."

AMD also pointed out that in the US, the US Federal Trade Commission (FTC) and New York Attorney General's office is also investigating Intel for abuses of its monopoly position. Meanwhile, in 2005, AMD filed private litigation in the US District Court of Delaware, which is scheduled for trial in spring 2010.

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