Intel Appeals $880m EC Fine

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Intel officials are appealing the European Commission’s $1.45 billion fine for antitrust violations, saying European regulators ignored the realities of a competitive processor market

As Intel officials had promised, the giant chip maker is appealing the European Commission’s $1.45 billion fine stemming from antitrust allegations leveled by rival Advanced Micro Devices.

Intel filed the appeal 22 July, calling the EC’s ruling wrong and did not take into account the realities of the highly competitive processor marketplace, which has resulted in lower prices and better products for consumers and businesses, according to a spokesman.

“In real terms, microprocessor prices have fallen faster than the prices of any other product tracked by the U.S. government,” Intel spokesman Bill Kircos said in a statement. “Similar research supports this worldwide including Europe.”

In addition, Kircos said, Intel never sells chips below cost.

The European Commission in May levied the fine, accusing Intel of illegally offering rebates to systems manufacturers for buying only Intel chips, and for making direct payments to OEMs to stop or delay the launch of products powered by x86 processors from chip makers other than Intel. The offenses allegedly took place between 2002 and 2007, according to the Commission.

The result was that millions of European consumers were harmed because they did not have access to competitive products.

The fine came at a time when the regulatory environment is changing in the United States as well, particularly with the Obama administration dismantling antitrust policies that some believed hampered the federal government’s ability to fight anti-competitive behavior by corporations.

The changes on the federal level have let some observers to expect that regulators will turn their eyes to such IT giants as Google and IBM, as well as Intel.

The appeal comes a week after Intel released second-quarter earnings that illustrated the impact the fine had on the chip maker’s business. Without the fine, Intel on 14 July posted strong numbers, including a $1 billion (£601m) profit on $8 billion in revenue. However, that profit swung to a $398 million loss when the EC fine was factored in.

For its part, AMD released disappointing second-quarter results July 21, with a $330 million loss on $1.18 billion in revenue.

Intel spokesman Kircos said Intel plans to keep doing business as usual while the appeal is underway.

“While we disagree with the decision and plan to appeal, we will work to cooperate with the Commission to ensure we’re in compliance with their decision,” he said. “Intel will continue to invest in the products and technologies that provide Europe and the rest of the world the industry’s best performing processors at lower prices.”

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