European commission 'poised to impose one of its biggest ever fines on Intel'
Legal experts predict commission will rule against semiconductor giant over anti-competitive practices
The European commission is expected to impose one of its biggest ever fines on Intel later this week, following an eight-year investigation into allegations of anti-competitive practices.
Legal experts believe the commission is likely to rule against the world's biggest semiconductor maker on Wednesday. As well as a financial penalty, Intel could also be hit with restrictions on how it operates in Europe.
Howard Cartlidge, head of EU competition law at Olswang, the legal firm, warned that Intel could face further legal action if – as he expects – the commission rules against it this week. "As well as receiving a very large fine, which would obviously be unwelcome, a negative ruling could also leave Intel open to damages claims – not only from AMD, but others who could claim they lost out," he predicted.
The commission has been looking into Intel's business practices since 2001, after the company was accused by fellow semiconductor maker AMD of giving rebates and incentives to computer manufacturers who agreed not to use AMD processors.
If the commission concludes that Intel has violated European antitrust rules it could impose a fine equal to 10% of its annual revenue – although in practice this maximum is rarely levied. Intel had a turnover of $37.6bn (£24.8bn) last year. Microsoft received the commission's largest penalty to date in 2004 when it was fined €497m (£447m) for antitrust violation.
Officials declined to say whether a ruling would come this week, commenting only that the case was "ongoing".
AMD launched its own legal action against Intel in 2005, accusing its larger rival of using "old-fashioned threats, intimidation and knee-capping" to build its number one position in the chip market. This case will not be heard until 2010
However, Cartlidge questioned whether such a ruling would have major implications for the rest of the technology sector. "We'll have to wait and see whether it changes Intel's conduct at all," he said. "They've probably been more cautious since this investigation started ... there's no point attracting further complaints."
In 2005, commission officials raided the offices of Intel and Dell. Two years later it filed formal charges against Intel, accusing it of giving "substantial rebates" to computer manufacturers if they bought most of their processing units from Intel, of selling products to large customers at a loss, and rewarding computer makers that scrapped or delayed the launch of PCs based on AMD chips. In 2008 the commission again raided Intel's offices, along with the headquarters of DSG.
As well as attracting negative publicity and potentially damaging Intel's reputation, a negative ruling could mar the departure of chairman Craig Barrett. He has worked for Intel for 35 years, including seven years as chief executive, and is due to step down later this month.
Graeme Wearden
Monday 11 May 2009 14.58 BST
guardian.co.uk © Guardian News and Media Limited 2009
Legal experts predict commission will rule against semiconductor giant over anti-competitive practices
The European commission is expected to impose one of its biggest ever fines on Intel later this week, following an eight-year investigation into allegations of anti-competitive practices.
Legal experts believe the commission is likely to rule against the world's biggest semiconductor maker on Wednesday. As well as a financial penalty, Intel could also be hit with restrictions on how it operates in Europe.
Howard Cartlidge, head of EU competition law at Olswang, the legal firm, warned that Intel could face further legal action if – as he expects – the commission rules against it this week. "As well as receiving a very large fine, which would obviously be unwelcome, a negative ruling could also leave Intel open to damages claims – not only from AMD, but others who could claim they lost out," he predicted.
The commission has been looking into Intel's business practices since 2001, after the company was accused by fellow semiconductor maker AMD of giving rebates and incentives to computer manufacturers who agreed not to use AMD processors.
If the commission concludes that Intel has violated European antitrust rules it could impose a fine equal to 10% of its annual revenue – although in practice this maximum is rarely levied. Intel had a turnover of $37.6bn (£24.8bn) last year. Microsoft received the commission's largest penalty to date in 2004 when it was fined €497m (£447m) for antitrust violation.
Officials declined to say whether a ruling would come this week, commenting only that the case was "ongoing".
AMD launched its own legal action against Intel in 2005, accusing its larger rival of using "old-fashioned threats, intimidation and knee-capping" to build its number one position in the chip market. This case will not be heard until 2010
However, Cartlidge questioned whether such a ruling would have major implications for the rest of the technology sector. "We'll have to wait and see whether it changes Intel's conduct at all," he said. "They've probably been more cautious since this investigation started ... there's no point attracting further complaints."
In 2005, commission officials raided the offices of Intel and Dell. Two years later it filed formal charges against Intel, accusing it of giving "substantial rebates" to computer manufacturers if they bought most of their processing units from Intel, of selling products to large customers at a loss, and rewarding computer makers that scrapped or delayed the launch of PCs based on AMD chips. In 2008 the commission again raided Intel's offices, along with the headquarters of DSG.
As well as attracting negative publicity and potentially damaging Intel's reputation, a negative ruling could mar the departure of chairman Craig Barrett. He has worked for Intel for 35 years, including seven years as chief executive, and is due to step down later this month.
Graeme Wearden
Monday 11 May 2009 14.58 BST
guardian.co.uk © Guardian News and Media Limited 2009
roud:
