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The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

June - 2009 - issue > Tech Tracker

Intel Fined $1.45 Billion for Unfair

Eureka Bharali
Monday, June 1, 2009
Eureka Bharali
The semiconductor giant Intel that has a market share of 77 percent has been slapped with a fine of $1.45 billion for its involvement in anti-competitive practices aimed at denting its rival AMD's market position. The penalty, decided by the European Commission (EU), is the biggest-ever penalty the Commission has imposed on a company for anti-competitive practices. Earlier in 2004, EU had imposed a fine of 447 million pounds on Microsoft for antitrust violation, less than half the amount demanded from Intel.

The fine on Intel is an upshot of an eight year old inspection of Intel's business practices following a complaint lodged by AMD about Intel's unfair practices to curb usage of AMD processors. The Commission found the semiconductor giant guilty of offering rebates and incentives to computer manufacturers who agreed not to use AMD processors. The major computer manufacturers who were unwittingly involved in the unfair practices include Acer, Dell, HP, Lenovo, and NEC. This hampered the rival manufacturers' ability to innovate and remain competitive against each other. The fine imposed is 10 percent of the company's worldwide sale.

Intel made payments to major retailer Media Saturn Holding from October 2002 to December 2007 on condition that it exclusively sold Intel-based PCs and also delayed the launch of specific products containing competitors' x86 CPUs. In June 2008, the Fair Trade Commission also ordered Intel to pay a fine of $25.5 million for offering incentives to major Korean PC manufacturers for not buying products from AMD.

Intel, however, refused to comply with the Commission's accusations and plans to appeal against the decision. If the penalty is waived, it will herald several other lawsuits from Intel's competitors. So, the ultimate market penalty on Intel may touch $2 billion.

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