Leaks from the European Commission in
Intel has been investigated by the EC for several years for abuse of its dominant position in the microprocessor market, specifically for promising customers discounts if they restrict their purchases of AMD microprocessors to certain, specified levels, and for subsidizing customers' advertising in return for being exclusively used by retailers.
The leaks from the EC now suggest that Competition Commissioner Neelie Kroes has made up her mind on the vidence, and will specifically debar Intel from both these practices.
Intel CEO Paul Otellini personally testified to the EC, but took an insouciant attitude to the investigation saying that the worst that could happen would be that Intel might have to write a cheque.
In Microsoft's case, when it lost out to an EC investigation, it was a pretty big cheque - 899 euros or $1.4 billion.
It will be interesting to see whether a similar fine could be shrugged off by Otellini as an irksome, but insignificant, expense for doing business the Intel way.
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Comments (4)
If Intel does pay a fine, will it be a one-off, or will they have to pay for every violation? Incidentally, I know the Euro has strengthened recently, but your figures suggest the US dollar may have weakened somewhat.
Posted by Peter Smith | June 3, 2008 1:32 PM
Posted on June 3, 2008 13:32
As I understand it, the fine would be a one-off following the current investigation.
If Intel was subsequently investigated again for further alleged infringements and was found guilty, then it could be fined again.
Each fine, for each investigation, is up to a tenth of Intel's annual revenues i.e. a maximum of $3.4 billion for the current investigation.
Well I've run the 900 Euro vs $1.4 billion conversion on my on-line converter and it comes out as equivalent.
Posted by David Manners | June 3, 2008 1:45 PM
Posted on June 3, 2008 13:45
Certainly, a one-off fine probably wouldn't worry Intel, but if the EC hit them each year, it might prove too much even for them. I wonder if there'll be a behind-the-scenes warning to them as to the likely consequences if they fail to comply? Would Intel be able to put any pressure on to limit the fine? I'd love to be a fly on the wall at that discussion!
As the the value of the fine, I'm afraid I was just being my usual pedantic self - I knew you meant 899 million Euros (or 0.899 billion), but the idea of 899 Euros being equivalent to $1400 million just made me smile!
Posted by Peter Smith | June 3, 2008 2:40 PM
Posted on June 3, 2008 14:40
Well Intel has been pretty active in Brussels for a couple of decades or more and must know the score by now. I expect there'll be negotiations, but the EC has to look at setting precedents, and if it imposes derisory fines that would only serve to encourage the others.
Yes I'd smile too, except I'm off to France next week for my holidays.
Posted by David Manners | June 3, 2008 2:48 PM
Posted on June 3, 2008 14:48