Intel accused of illegal sales practices to encourage manufacturers to use its microprocessor chips

The European Commission has fined Intel a record €1.06bn for abusing its dominant position and excluding competitors from the computer chip market. It is one of the biggest fines ever imposed by Brussels.

Intel breached European antitrust rules by excluding competitors from the market for central processing units (CPUs), said the Commission.

The Commission has also ordered Intel to cease the illegal practices immediately.

Throughout the period October 2002-December 2007, Intel had a dominant position in the worldwide x86 CPU market (at least 70% market share), said the Commission.

The Commission found that Intel engaged in two specific forms of illegal practice.

First, Intel gave wholly or partially hidden rebates to computer manufacturers, including Acer, Dell, HP, Lenovo and NEC, on condition that they bought all, or almost all, their CPUs from Intel. Intel also made direct payments to Media Saturn Holding, owner of the MediaMarkt chain, on condition it stock only computers with Intel CPUs.

“Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated.

Competition Commissioner Neelie Kroes

Such rebates and payments effectively prevented customers—and ultimately consumers—from choosing alternative products, said the Commission.

Second, Intel made direct payments to computer manufacturers to halt or delay the launch of specific products containing competitors’ CPUs and to limit the sales channels available to these products.

The Commission found that these practices harmed consumers by undermining competition and innovation.

The world market for CPUs is currently worth approximately €22bn, with Europe accounting for approximately 30% of that.

Competition Commissioner Neelie Kroes said: ‘Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated.’