EU Sheds Light on Intel’s Massive Fine

Antitrust regulators on Monday detailed evidence from Intel clients that led to the European Commission’s record 1.06 billion euro ($1.6 billion) fine on the U.S. chip giant for illegally shutting out rival AMD.

In its May decision, the European Union’s executive Commission said Intel paid computer makers to postpone or scrap plans to launch products using AMD chips, gave illegal rebates and paid a retailer to stock only computers with Intel chips.

Intel, the world’s No. 1 chipmaker, appealed to Europe’s second-highest court in July, saying the fine was “manifestly disproportionate” and that the Commission had failed to prove that its actions harmed consumers or thwarted competitors.

The company said on Monday that the Commission had “dismissed or ignored extensive exculpatory evidence.”

It said the EU executive had construed ambiguous documents in a manner adverse to Intel while overlooking other papers that contradicted its case.

Internal documents from Intel’s clients — Dell, Hewlett-Packard Co, NEC Corp, Lenovo and Media Saturn Holding — and their evidence showed Intel conducted two types of illegal practice, the Commission said.

It cited a February 2003 internal Dell presentation in which the company said Intel’s retaliation “could be severe and prolonged with impact to all lines of business” should Dell switch any part of its central processing unit supplies to AMD.

HP told the Commission that Intel had granted its credits subject to an unwritten requirement “that HP should purchase at least 95 percent of its business desktop system from Intel.”

A December 2006 email from a Lenovo executive said the PC maker had cut a “lucrative deal” with Intel under which Lenovo would not be introducing AMD-based products for its Notebooks in 2007.

The non-confidential version of the Commission’s decision is available here