Tag Archives: Oligopoly

Power and Intel’s fine

Yesterday, the European Commission imposed a record €1.06 Billion fine on Intel for violating EC antitrust rules on the abuse of a dominant market position.  Between Oct. 2002 and Dec. 2007, the company had a global share of x86CPU sales to OEM’s of 70% and the EC found that Intel had secret payments with its OEM channel and a large retail channel to muscle out AMD.  These payments were took the form of conditions that prohibited the OEM from purchasing any AMD CPU’s or beyond a stated percentage.  To one computer manufacturer, AMD offering a million free CPU’s. In the end the customer took only 160k, fearing losing its Intel rebate.  The EC found such practices illegal and resulted in EU customers paying more for computers. Intel, naturally stated that it will appeal.

While not condoning anti-competitive behaviour, this does prove the point that much of commerce, particularly in oligopolies, is sotto voce.

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