EU Fines Intel $1.45B for Antitrust Abuse

Updated from 6:50 a.m. EDT

The European Union has fined Intel(INTC) a record 1.06 billion euros ($1.45 billion) for breaking European antitrust laws.

The fine exceeds a monopoly abuse penalty of 899 million euros for Microsoft(MSFT) last year.

The European Commission, the EU's executive arm, is ordering Intel, the world's largest semiconductor maker, to halt sales tactics immediately that it said blocked smaller rival Advanced Micro Devices (AMD) from selling computer chips. The commission said it would actively monitor Intel to see if it is complying with its ruling.

The European Commission said the company gave price discounts to computer manufacturers Acer, Dell(DELL), Hewlett-Packard(HPQ), Lenovo and NEC for buying all or almost all their chips from Intel.

It says Intel also paid them to stop or delay the launch of computers based on AMD chips.

"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 E.U.'s antitrust rules cannot be tolerated," said Competition Commissioner Neelie Kroes.

Intel President and CEO Paul Otellini said the company would appeal to the EU courts because "the decision is wrong" and "there has been absolutely zero harm to consumers." The company promised to comply with the EU order but criticized it as extremely ambiguous.

The news of the fine follows encouraging comments Tuesday from Otellini about that state of the chipmaker's business.

Otellini said orders have been "a little better than we expected" in the second quarter. "A lot depends on June."

Otellini was speaking at a meeting with analysts and investors in Santa Clara, Calif., where Intel is based.

Intel's stock, which fell 1% in regular trading, rose almost 3% to $15.64 in the after-hours session on Tuesday.

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