EU hands down record antitrust fine to Intel

By Foo Yun Chee and David Lawsky

BRUSSELS/SAN FRANCISCO (Reuters) - EU regulators on Wednesday slapped a record 1.06 billion euro ($1.45 billion) fine on Intel Corp for antitrust violations and ordered it to halt illegal efforts to squeeze out arch-foe AMD.

Analysts say the move, which Intel CEO Paul Otellini vigorously contested, may help AMD recoup some of the market share lost to its bigger and nimbler rival over past years, but is not expected to radically transform Intel's operation.

The decision may also force U.S. regulators to act, analysts say, with South Korea and Japan already accusing the company of antitrust violations.

Shares in Intel, which had slid 6 percent since Reuters broke news of the impending sanction on May 7, closed at $15.13, down 8 cents or 0.53 percent, while the Nasdaq fell 3 percent. AMD finished trade on the New York Stock Exchange up 3 cents, or 0.69 percent, at $4.38. It had been up as much as 1.2 percent earlier.

The European Commission said the world's No.1 chipmaker paid computer makers to postpone or scrap plans to launch products using AMD chips, paid illegal rebates to encourage them to use Intel products and paid a retailer to stock only computers with Intel chips.

Intel argued the decision was based on weak evidence that must be reviewed on appeal to an EU court.

"We do not have those kinds of conditions in our contracts. Our contracts are straightforward, consistent worldwide and they are volume-based: the more you buy, the less you pay," Chief Executive Paul Otellini said on a conference call.

"There is a significant amount of evidence that was either ignored or disregarded, or both."