Intel loses EU Anti-Trust Appeal and gets fined a Massive 1.4 Billion Dollars

This year is turning out to be a roller coaster ride for Intel stock holders and fans. The company recently shutdown a major fab, namely Costa Rica, and now has to pay a massive fine for being found guilty of Monopolistic practices under European Law.

Intel Looses Critical Appeal in EU Court and gets fined 1.06 Euros for Monopolistic and Anti-Innovation Practices

The first thing that came to my mind was that woah, Intel could have bought IBM’s Chip Business with that amount of green. But sadly, this chunk of Intel’s money is going into the European Fine Jar. To those who don’t know the context of this fine, allow me to elaborate. Basically Intel offered rebates to OEMs such as Dell, HP and Lenovo to opt for Intel Chips instead of AMD ones some years ago. The aforementioned OEMs ofcourse happily accepted and gave Intel their loyalty, however, it basically meant that AMD with its x86 rival products could not compete on merit alone. Such type of behavior is termed as monopoly-inducing or anti-competitive behavior. Conduct like this is basically illegal because it grants too much power to a firm and promotes stagnation in the innovation department.

Ironically however, Intel has become an Industry leader and can now be considered arguably monopolistic in the compute sector. And now it has to pay the price for that, at least in the European Market. Now this fine was originally imposed back in 2009 and I have to say the sum is pretty large. Infact, Intel filed the appeal on exactly these grounds, that the sum is “Disproportionally Large” and to be fair to Intel, it does look like it is. But if you play with fire you are going to get burned, and if you are going to utilize grey tactics then you better be prepared to pay the price if you get caught.