The wheels of justice turn slowly indeed. Almost a full decade after Advanced Micro Devices first complained about its larger competitor, Intel, the European Commission on Wednesday handed down its largest ever fine for abuse of a dominant market position, ordering Intel to pay €1.1bn. The decision follows a 2005 ruling in Japan, and another in Korea last year, that found abuse by Intel. But do the opinions of bureaucrats matter?

Shareholders don’t think so. The share price of Intel, which had sales last year of $38bn, not to mention a market capitalisation of $85bn and $10bn of cash, barely moved on the news. The company disputes the finding and will appeal, further lengthening the process. European attempts at intervention with Microsoft, including then-record fines, trundle along, with little effect on the company’s behaviour. Investors are far more interested in Intel’s attempts to cut costs, improve margins and control inventories, the main subject of its analyst day on Tuesday.

The ruling may give some help to AMD. Favourable precedent could help the company’s civil suit against Intel set for trial in Delaware next March. Separate investigations by the Federal Trade Commission and the New York attorney-general’s office are ongoing, and any form of settlement would help relieve AMD’s debt load.

In terms of the market for microprocessors, however, little will change. The practice in question is allegedly restrictions attached to volume rebates, not the principle of rebates themselves. With about 70 per cent of the market for microprocessors – the central engine of every computer – Intel benefits from a self-reinforcing scale advantage that allows it to outspend AMD on research and development by more than four to one. In technology, trends in market share are rarely reversed. Plodding regulators can do little to change that fact.

To e-mail the Lex team confidentially click here
To post public comments click here

The Lex column is now on Twitter. To receive our daily line-up and links to Lex notes via Twitter, click here


Lex is the FT’s agenda-setting column, giving an authoritative view on corporate and financial matters. It is also one of the few parts of available only to Premium subscribers. This article is provided for free as an example. A Premium subscription gives you unlimited access to all FT content, including all Lex articles and the FT mobile Newsreader.

Subscribe now

If you have questions or comments, please e-mail or call:

US and Canada: +1 800 628 8088
Asia: +852 2905 5555
UK, Europe and rest of the world: +44 (0)20 7775 6248

Copyright The Financial Times Limited 2023. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Follow the topics in this article


Comments have not been enabled for this article.