The European Commission has today imposed a €1.06bn fine on Intel for abusing its dominant position in the market for microprocessors, in breach of article 82 of the EC Treaty. The Commission finds that Intel abused its dominant position by offering conditional rebates that excluded its main rival AMD and offering payments to PC manufacturers to delay the launch of systems incorporating AMD microprocessors.

The European Commission (the Commission) has today imposed a €1.06bn fine on Intel for abusing its dominant position in the market for microprocessors, in breach of article 82 of the EC Treaty.  

This fine is the highest ever fine imposed by the Commission for a breach of article 82 (and is more than double the €497m fine imposed on Microsoft in 2004). It is also the highest fine imposed by the Commission on any single company for any breach of competition law.  

The Commission finds that Intel abused its dominant position in two specific ways: first, by offering rebates to a range of PC manufacturers and to a PC retailer, which were conditional on buying all or almost all of their microprocessors from Intel; and, second, by making payments to PC manufacturers to halt or delay the launch of products containing rivals’ microprocessors.  


There are two major worldwide players in the market for microprocessors for computers (other than servers): AMD and Intel. These microprocessors (known as x86 CPUs) are the core of any computer.  

In 2000, AMD, the smaller of the two, made a complaint to the Commission that Intel was abusing its dominant position. It followed this up with further complaints in 2003 and 2006.  

After a lengthy investigation, the Commission issued a statement of objections against Intel in 2007 and issued a supplementary statement of objections in 2008. Today’s decision follows from those statements of objections. Intel has already indicated that it plans to appeal the decision.  

Intel’s dominant position  

The Commission finds that Intel has a dominant position in the market for x86 CPUs, with a market share of ‘at least 70 per cent’. In a speech accompanying today’s decision, Neelie Kroes, the Competition Commissioner, is, as ever, at pains to insist that the Commission’s objection is not to the existence of this position in itself: ‘The fact that Intel had such a large market share is not a problem in itself. What is a problem is that Intel abused its dominant position.’  

The abuses identified by the Commission  

The first category of abuse identified by the Commission relates to conditional rebate payments to PC manufacturers (Acer, Dell, HP, Lenovo and NEC) and to a single retailer (Media Saturn Holdings, which owns the Media Markt chain).  

The Commission stresses that its objection is not to rebates in themselves, but to the conditions attached to those rebates. The decision states that the rebate agreements with the PC manufacturers contained conditions requiring the manufacturers to purchase anything from 80 to 100 per cent of their x86 CPU needs for particular lines (or, in some cases, their business as a whole) from Intel.

The Commission goes on to explain that the rebate agreement with Media Saturn Holdings was similarly conditional on selling only Intel-based PCs. The Commission finds that these conditional rebates had the effect of excluding AMD to the detriment of consumers.  

The second abuse identified by the Commission is a series of payments by Intel to PC manufacturers to delay or cancel the launch of products based on AMD microprocessors. Some of the payments are also found to have been in return for imposing conditions on the way in which AMD-based PCs were distributed (for example, only to SMEs).  

Again, the Commission finds that these payments (characterised today by Neelie Kroes as ‘pay for delay’) excluded AMD and so hurt consumer choice.  

The Commission’s reasoning  

The Commission’s full reasoning will be made public when the full text of the decision (which is said to be over 500 pages long) is published in the coming weeks. However, today’s press release gives a flavour of the Commission’s reasoning.  

On the conditional rebates, the Commission explains that its reasoning is consistent with that laid down by the European Courts in the major conditional rebates cases such as Michelin and British Airways.  

The Commission does, though, provide a deeper analysis of the effect of those rebates than is strictly mandated by those decisions. In doing so, it appears to be consistent with the approach taken in its recent Guidance Paper on its enforcement priorities for article 82 cases, and with the fuller article 82 Discussion Paper that preceded this. In particular, today’s press release sets out the terms of the analysis undertaken by the Commission regarding the share of demand that a rival like AMD could realistically access (given Intel’s ‘must have’ status), the effect of the ‘roll-back’ nature of the rebates (meaning that customers would lose the rebate over all their units if they did not meet the thresholds), and the effect of Intel’s rebates on the price that a rival would have to charge to access the contestable part of the market. It can be expected that the full decision will contain (to the extent it is not redacted for confidentiality) a relatively full economic analysis on this point – consistent with the Commission’s wish to introduce more economic rigour into its article 82 decision-making.  

It is also worth noting that the Commission makes several explicit statements that Intel’s right of defence have been fully protected. Intel brought a challenge in the European Court of First Instance, alleging that its rights of defence had not been respected. Their request for interim measures was rejected by the court. As a result of this challenge, though, it is probably unsurprising that the Commission is at pains to state that Intel’s rights have been respected.  

The fine  

The Commission’s fine is the largest ever levied on a single company and is much larger than the fine imposed on Microsoft in 2004 for breaching article 82.  

The Commission explains that it has been calculated consistent with its fining guidelines, based on Intel’s sales of x86 CPUs in the European Economic Area for the period of the abuse (which the Commission finds was five years and three months). In today’s speech, Neelie Kroes notes that it is the scale of the infringement that has led to such a significant fine: ‘Given that Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for over five years, the size of the fine should come as no surprise.’  

The fine remains far short, though, of the theoretical maximum of 10 per cent of Intel’s global turnover. The fine represents only 4.15 per cent of Intel’s turnover in the relevant year.  

Intel is also obliged by the decision to desist from the practices identified as abusive by the Commission.  


Like Microsoft, this has been a very lengthy investigation by the Commission, and one that has coincided with its review of the economic and analytical rigour with which it undertakes article 82 cases. Today’s press release makes clear the Commission’s commitment, as flagged up in the Guidance Paper on article 82 enforcement priorities, that an analysis of the effect of the behaviour in question is regarded as being a key part of its approach.

The decision – in particular, the fine – also appears to be a signal that the Commission remains committed to pursuing large abuse of dominance cases, even in a more challenging economic climate.