EU Slaps Intel with $1.43B Antitrust Fine, AMD Reprieved

The European Union (EU) has finally laid down its much-anticipated antitrust fine against microprocessor firm Intel. Almost a decade after rival Advanced Micro Devices first complained about Intel's business practices, the EU has slapped the latter with a massive 1.06 billion euro fine.

The complaint was first lodged in 2001. The gist: eight years ago AMD claimed that competitor Intel had violated antitrust laws by pressuring retailers to push its own microprocessors over those of its rivals through retroactive rebates. Such practices made buying a processor cost-effective for everyone but AMD, which later claimed that Intel had paid retailers to encourage consumers buy only the products of AMD's arch nemesis.

$1.43 Billion U.S. Fine for Intel

And so, this week the European Commission (the executive branch of the EU) decided that such business practices had hurt AMD and by extension competition and consumers. The result is the huge 1.06 billion euro, or $1.43 billion USD, fine. It's a heavy levy, no doubt.

Not surprisingly, Intel is upset. CEO Paul Ortellini believes it's a bit excessive, arguing that his company's practices had little impact on the consumer. "It's hard to imagine how consumers were harmed in an industry which has lowered the cost of computing by a factor of 100 during the term of this case," he said. (Source: theregister.co.uk)

AMD: Price Cuts Could Have Been Deeper

For its part, AMD believes Intel could have helped bring the price of chips down even further.

"The thing to focus on is where prices and innovation could have been if there had been a free and open market," said AMD vice president of platform marketing Pat Moorhead. "Nobody says there's a limit to the amount of innovation out there or a limit to the amount that market prices can fall."

Analysts don't believe the decision will have a huge impact on processor sales. Many argue that AMD's problems are tied to poor marketing and technical issues that keep their products from performing better than their rivals. Both of these issues need to be addressed before AMD can unseat Intel. (Source: cnet.com)