The Intel European fine: What it may mean for Americans

Will American computer consumers feel the effect of the huge fine for antitrust regulations levied against chipmaker Intel by European regulators? Very likely yes, in ways both direct and indirect. But there's no consensus on whether those effects will be beneficial or not.

The $1.45 billion fine by the European Commission—the largest the EU has ever levied—may give Intel pause in how it deals domestically with AMD, the other giant in semiconductor manufacturing. The result could be a more competitive global market for semiconductors, the components that are at the heart of computers' processing power.

In a statement issued by Intel CEO Paul S. Otellini, the company asserted that the decision was wrong, that there had been no harm to consumers, and that it would appeal the decision, but comply with it during the appeal process.

If Intel were to take a less aggressive stance toward AMD, it could mean lower costs for chips—or an end to what AMD Executive Vice President Tom McCoy today called "Intel's monopoly-inflated pricing." Yet some analysts are already predicting just the opposite, saying the decision could discourage the continuous price-cutting in semiconductors that has, for decades, delivered ever-better and ever-cheaper computers.

There are also predictions that the decision will spur a U.S. investigation or indictment of Intel. The FTC is in the midst of its own antitrust investigation of Intel, and the Obama administration says it has plans to beef up antitrust-law enforcement.

The Commission found that the chip manufacturer was giving rebates to computer makers who agreed to buy all or most of their chips from Intel. The decision also says Intel paid some computer manufacturers to postpone or cancel launches of computers using processors from competitor AMD.

"The fact that Intel had such a large market share is not a problem in itself," said competition commissioner Neelie Kroes. "What is a problem is that Intel abused its dominant position. Specifically, Intel used illegal anti-competitive practices to exclude essentially its only competitor, and thus reduce consumer choice, in the worldwide market for x86 chips.”

In the ruling, the European Commission names Acer, Dell, HP, Lenovo, and NEC as "the computer manufacturers concerned by Intel's conduct.” The Commission says it will "monitor Intel's compliance" with its decision. —Donna Tapellini