It has been just a bit over 5 years but, like that proverbial elephant, the European Union doesn’t forget, even if Intel wished it did. The region’s General Court has just confirmed the European Commission’s 2009 verdict that could see the chip maker pay as much as €1.06 billion, which, with today’s exchange rates, stand at $1.44 billion.
As part of its crackdown on antitrust violations in the region, the European Union turned its eyes on Intel and found the company guilty of such practices, particularly against its chief rival, AMD. According to the EC’s findings back then, Intel’s illegal practices harmed not just AMD but millions of customers who were deprived of the choice, or even the knowledge that they had choice, because of Intel’s underhanded tactics. In the EC’s mind, the enormous fine is proportionate to the crime committed.
Naturally, Intel contested both the decision and the sum, an appeal that dragged on for years. Unfortunately for it, the General Court sided with the commission. The Court reiterated the Commission’s finding of how Intel paid bribes, specifically to a German retailer, to keep AMD machines out of its shelves and how rebates given to OEMs practically ensured that other chips would not see the light of day in stores. Coincidentally, this was the same kind of practice that led the European Commission to impose a €497 million fine on Microsoft back in 2004.
As to the price of the fine, the General Court is practically telling Intel that it is getting off easy. The fine was based on the Commission’s calculation of Intel’s sales between 2002 and 2007 and imposed what it considered to be proportionate to the damage done. The total amount of the fine was actually only 4.15 percent of Intel’s annual turnover. The Commission could have actually demanded 10 percent, the maximum amount it was legally allowed to impose.
Of course, Intel is dismayed at the decision and believes that the EC’s decision was entirely flawed. It still has one more legal recourse, however. It can still file one last appeal to the European Union’s highest legal authority, the European Court of Justice, within seventy days of the General Court’s ruling. Intel is still studying that ruling and its available options but is quite confident that the fine will have no financial ramifications on their business.