The European Union has imposed a fine of €1.06 billion ($1.44 billion) Wednesday on Intel Corporation for violating EU treaty antitrust rules on the abuse of a dominant market position.

The Commission says Inter Corporation was found engaged in illegal anticompetitive practices to exclude other competitors from the market for computer chips called X86 central processing units (CPUs).

The Inter Corporation broke EU competition law by exploiting its dominant position with a deliberate strategy to keep AMD out of the market, the Commission said in a statement.

Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated, said Neelie Kroes, EU's Competition Commissioner.

The Commission has also ordered Intel to cease the illegal practices immediately to the extent that they are still ongoing. Throughout the period October 2002-December 2007, Intel had a dominant position in the world wide X86 CPU market (at least 70% market share).

It says the company gave wholly or partially hidden rebates to computer manufacturers such as Acer, Dell, HP, Lenovo and NEC on condition that they bought all or almost all their X86 CPUs and paid them to stop or delay the launch of computers based on AMD chips.

The Commission said these practices constituted abuses of Intel’s dominant position on the x86 CPU market. By undermining its competitors’ ability to compete on the merits of their products, Intel’s actions undermined competition and innovation.

Last year, South Korea also fined $21 million on Inter Corporation. As the Obama administration is set to take a more aggressive approach against monopoly abuse by reversing a strict interpretation of antitrust law, the U.S. may be stepping up action on that and the Federal Trade Commission also upgraded a probe into Inter last year.

The world market for x86 CPUs is currently worth approximately €22 billion (US$ 30 billion) per year, with Europe accounting for approximately 30% of that.

Intel