Intel Corp. (INTC) will have to pay a record EUR1.06 billion fine for breaking European antitrust laws, the European Commission said Wednesday.

The executive arm of the European Union found the world’s largest computer chip maker illegally kept smaller rival Advanced Micro Devices Inc. (AMD) out of competition by paying computer manufacturers and retailers not to use its products.

The commission said Intel provided rebates to computer makers on condition they bought most – often up to 95% – of their computer chips from Intel. Intel also made direct payments to major retail chain MediaMarkt so it would only sell computers with Intel’s chips, the commission said.

Intel also paid computer manufacturers to halt or delay the launch of the residual number of computers that contained AMD’s chips to further reduce customer choice, the commission said.

The commission has ordered Intel to stop these practices immediately, and said it would actively monitor Intel’s compliance with its decision.

“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 E.U.’s antitrust rules can’t be tolerated,” said Competition Commissioner Neelie Kroes.

The commission has made a list of practices that won’t be tolerated, Kroes added, pointing out that while rebates themselves aren’t illegal, the practice of tying them to market abuses is.

Intel said it would appeal the decision, disagreeing strongly with the commission’s findings. Intel operates in a highly competitive marketplace and its investment in innovation and manufacturing enable it to discount its products, said Intel Chief Executive Paul Otellini.

Prices of computers and chips have fallen at a 100-to-1 ratio, said Bruce Sewell, Intel’s general counsel.

Source Wsj.

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