) lost its five-year old legal battle appealing the European
Union's (EU) judgment to levy a record $1.44 billion (1.06 euro)
fine on the chipmaker for allegedly using anti-competitive
practices against fellow competitor
Advanced Micro Devices
The General Court of Luxembourg, EU's second-highest court, upheld
the decision by the EU to penalize Intel, asserting that the
judgment was both appropriate and justified given the nature of the
incident. The fine is the biggest single antitrust penalty imposed
for market abuse by the EU.
The battle dates back to 2009, when the European Commission's
regulatory investigation found Intel guilty of breaching anti-trust
laws in the 2002-07 period. Intel tried to illegally persuade PC
makers including Dell, HP and Lenovo to buy its chips over
competitors. Intel had allegedly offered them rebates if they
agreed not to use competing products from AMD. In addition, Intel
also tried to block rival AMD by making payments to HP, Lenovo and
Acer to delay or stop the launch of computers using AMD chips.
However, Intel challenged those facts, claiming that the chipmaker
lawfully contested against AMD and others and that its business
practices have never violated antitrust or other laws.
Intel, therefore, sought an annulment of the verdict. On failure,
it appealed for a significant reduction in the fine. However, the
EU's General Court rejected the plea and ruled against the
arguments raised by Intel, declaring the fine imposed to be
Intel can proceed with the case further at the Court of Justice.
However, the chipmaker declined to comment on whether it is ready
to drag the five-year old case any further.
The public has already tried and convicted Intel over the issue, so
further damage to its brand name will be limited. The impact on its
financials will also be limited since the amount was provided for
by the company in the June quarter of 2009 and followed by a
settlement with AMD in the fourth quarter of that year.
In any case, Intel's cash position was solid at $4.78 billion at
the end of the first quarter. It generated $2.5 billion of cash
during the quarter. Of course, Intel does have many challenges at
the moment, not the least of which is competing technology from
Intel shares carry a Zacks Rank #3 (Hold).
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