EU’s top court confirms $1.4 billion fine for Intel

June 12, 2014, 10:02 AM UTC
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SANTA CLARA, CA - JULY 20: A sign is posted at the Intel company headquarters on July 20, 2011 in Santa Clara, California. Intel will report their quarterly earnings today after the market closes. (Photo by Justin Sullivan/Getty Images)
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Intel Corp. (INTC) has lost its fight against a €1.06 billion ($1.43 billion) antitrust fine from the European Union.

The European Court of Justice, the EU’s equivalent of the Supreme Court, said Thursday it had rejected Intel’s appeal against the fine, which was levied for using sweet deals with PC makers a major retailer to squeeze its rival, Advanced Micro Devices Inc. (AMD) out of a global market now worth around $40 billion a year.

The ruling seals Intel’s most expensive defeat yet in a series of antitrust investigations against it in the US, Europe, Japan and South Korea. The fine–the biggest ever handed down for market abuse by the EU–dwarfs the $25 million penalty that Intel got from South Korea. The US Fair Trade Commission, which had sued Intel in 2009, had settled its case with the company without any fine at all. It did, however, force Intel to agree to major changes in its sales practices.

The EU’s case dates back to 2009, and covers the time between 2002 and 2007, when Intel was coming under increasing pressure from AMD. At the time, it had a 70% market share for microprocessors in the EU market. It still dominates a global market for chips worth over $40 billion, according to consultants IDC.

The Court ruled that Intel had offered PC makers Dell, Lenovo, Hewlett-Packard (HP) rebates on the price they paid Intel for chips, on the condition that they would only buy from Intel.  It also paid HP, Acer and Lenovo to postpone or cancel the launch of products that used AMD’s technology.

It also offered discounts to Media-Saturn Holding GmbH, owner of the Saturn and Media Markt chains of electronics shops which themselves are dominant in the German, Swiss and central European markets.

The Court said that the fine amounts to 4.15% of Intel’s annual revenue, less than half of the maximum 10% fine that it has the power to levy. Intel had tried to argue that the size of the fine was excessive.

Intel didn’t immediately respond to an e-mailed request for comment.