EU produces evidence for €1.1bn Intel fine

Internal e-mails at Dell purported to warn of “severe and prolonged” repercussions if the computer manufacturer switched business away from Intel and in favour of the chipmaker’s main rival, according to evidence made public by Europe’s top competition regulator on Monday.

Internal documents from other Intel customers, including Lenovo, NEC, Hewlett-Packard and retailer Media Saturn Holding, also showed rebates were linked to tight restrictions on the amount of chips that could be purchased from rival AMD, according to the European Commission.

The competition watchdog on Monday published a non-confidential version of its May decision, which accused Intel of breaching EU antitrust rules and imposed a €1.1bn ($1.6bn) fine. This was the largest single penalty imposed on any company for competition breaches in the EU.

The Commission says that decision, and the evidence contained in it, show how Intel broke the law through the conditional rebates and so-called “naked restrictions” that aimed to prevent or delay the launch of computers based on competing products. The decision details why it believes Intel tried to conceal its practices.

Publication of the decision was quickly welcomed by AMD, which said: “The facts are clear ... Finally, the world can see the evidence that Intel has tried to hide for so long.”

Intel quickly hit back, stressing that it was appealing against the Commission’s decision and was “convinced that the commission’s conclusions ... are wrong, both factually and legally”.

It claims “the commission relied heavily on speculation found in e-mails from lower-level employees that did not participate in the negotiation of the relevant agreements if they favoured the commission’s case”.

It also maintains: “At the same time, they [Commission officials] ignored or minimised hard evidence of what actually happened, including highly authoritative documents, written declarations, and testimony given under oath by senior individuals who negotiated the transactions at issue”.

The chipmaker also accuses the Commission of “consistently construing ambiguous documents in a manner adverse to Intel”.

The Commission decision is likely to make interesting reading for other regulatory authorities. In addition to the appeal to the EU courts, the company is engaged in damages litigation with AMD in the US and its behaviour is being reviewed by regulators in the US.