Intel has come out fighting, after being slapped with a record €1.06bn fine by the EU for anti-competitive practices. Paul Otellini, chief executive, responded almost instantly with a statement that Intel planned to appeal.

“Intel takes strong exception to this decision,” he said. So the Brussels lawyers and the computer industry can now look forward to a protracted battle before there is any sort of finality to this.

The fine is certainly enormous, dwarfing even the sums Microsoft has had to pay. However, it’s not clear how much this ruling will really change.

Very little has changed with the behaviour of Microsoft, for example, despite all the EU’s efforts at intervention. Brussels ruled against Microsoft in 2003, saying it had harmed competition by tying its Media Player into the Windows system. It ordered Microsoft to share some of the code for Windows with rivals. In 2004 it fined Microsoft €497m - a record fine at the time - for failing to do this. Microsoft appealed, things dragged on and in 2008 the EU gave Microsoft an additional fine of €899m for not complying with the 2004 ruling. And then in 2008 it launched a new investigation over complaints that Microsoft was using its dominant market position to harm the internet browser market. It seems that nothing has changed.

With Intel we can now look forward to years of appeals and lobbying. At the Microsoft rate, it will be at least 2015 before the EU can expect to see any of that fine money on the table.  In Japan, where anti-trust authorities found Intel guilty of similar practices in 2005, Intel has never admitted any guilt. A 2008 ruling in South Korea, where Intel was found guilty, is still under appeal. Clearly, this will be a long game.

Whether it will make any difference to the fortunes of rival and complainant AMD is too early to say. Intel has, for example, stopped its illegal rebate practices in Japan, but AMD’s market share has not zoomed markedly in that country. The biggest market share shifts are likely to come from changes in technology - as laptops, netbooks and mobile phone merge, for example, there may be a need for smaller, less power-hungry chips than Intel has to offer, and this may change the balance of market shares. A significant move towards greener data centres, for example, could be another disruption in the market that will allow competitors to make gains against Intel. History suggests that anti-trust law alone - however large the fine - will not accomplish these shifts, however.

Tags: anti-trust, competition, EU, fine, intel, microsoft

May 13, 2009 12:13pm in Computers, Europe | Comment