European Commission hits Intel with new fine over antitrust findings

Updated The European Commission has re-imposed a fine of €376.36 million (about $400 million) on chipmaker Intel for abusing its dominant position in the x86 processor market. The move is the latest twist in an antitrust saga that has been now running for more than two decades.

According to the Commission, the fine is in response to previously established anticompetitive practices by the silicon giant, aimed at excluding competitors from the market in breach of EU competition rules.

The original fine handed to Intel in 2009 was for €1.06 billion ($1.2 billion), based on findings that the company had given incentives to PC makers to use its CPUs instead of those from rivals, or else delay the launch of specific products containing rival chips.

These incentives consisted of wholly or partially hidden rebates for using Intel chips, or payments in order to delay launching products with rival chips, amounting to so-called “naked restrictions.”

It ultimately goes back to complaints from rival CPU maker AMD in 2000 and again in 2003 that Intel was engaging in anticompetitive conduct by offering rebates to vendors to favor Intel components.

Intel fought the decision, but an appeal by the Silicon Valley outfit to have it overturned was initially denied in 2014. Then in 2022, the EU General Court partially annulled the 2009 ruling by the Commission, in particular the findings related to Intel's conditional rebates, and went on to nix the fine imposed on the company in its entirety.

The decision to drop the fine was based on an argument from Intel that the Commission had not properly applied tests for determining if the rebates and payments had in fact restricted competition.

Always one to push its luck, Intel then asked the General Court to award it compensation from the EU for all the inconvenience.

However, the General Court had also confirmed that Intel's "naked restrictions" amounted to an abuse of dominant market position under EU competition rules, and so the Commission then reopened its administrative procedures in order to determine a fine against Intel based on those findings.

The result is the decision today to impose a financial penalty on Intel that applies only to those "naked restrictions." According to the Commission, these took place between November 2002 and December 2006 and comprised payments from Intel to three computer manufacturers (HP, Acer and Lenovo) to halt or delay the launch of specific products containing rival x86 processors, and to limit the sales channels available to these products.

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The lower fine of €376.36 million imposed with today's decision reflects the narrower scope of the infringement that took place compared to the 2009 decision, the Commission said.

Intel, it seems, was cognizant of the possibility that it could still face some kind of penalty, as it noted in its annual report earlier this year: "Given the procedural posture and the nature of this proceeding, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from this matter."

We asked Intel for its reaction to the news and if it intends to appeal the decision, and will update this article if we receive a response. ®

Updated at 15.44 UTC on September 22, 2023, to add:

An Intel spokesperson sent us a statement:

"We are reviewing today’s decision and fine, which follows from the European General Court’s 2022 vindication of Intel in the key contentions of the case, resulting in the return to Intel of the original 2009 fine of 1.06 billion Euros. This decision relates to the smaller part of the original 2009 European Commission Decision. While we are disappointed in a fine of this amount, we continue to focus on our future investments in the EU, and on cooperating with the EC in helping advance Europe’s semiconductor industry."