Intel Corporation: European Union Antitrust Case

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Case Details:

Case Code : ECON030
Case Length : 25 Pages
Period : 2001-2009
Pub. Date : 2009
Teaching Note :Not Available
Organization : Intel Corporation
Industry : Computers, IT and ITeS
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"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."¹

- Neeli Kroes, Competition Commissioner, European Commission², in May 2009.

"We do not believe our practices violated European law. The natural result of a competitive market with only two major suppliers is that when one company wins sales, the other does not."³

- Paul Otellini, CEO, Intel Corporation, in May 2009.

"[The Commission] wanted to send a clear signal that it is taking a leadership role in enforcing competition rules against dominant companies in the technology markets."⁴

- Michael Reynolds, antitrust partner, Allen & Overy⁵, commenting on EC's ruling, in May 2009.

Introduction

On May 13, 2009, the European Commission (EC) slapped a fine of € 1.06 billion on California-based Intel Corporation (Intel), the largest semiconductor company in the world, for violating the antitrust policies of the European Union (EU).

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Intel Corporation: European Union Antitrust Case - Next Page>>

1] "Antitrust: Commission Imposes Fine of €1.06 bn on Intel for Abuse of Dominant Position; Orders Intel to Cease Illegal Practices," http://europa.eu, May 13, 2009.
2] Headquartered in Brussels, the European Commission (EC) is the executive body of the European Union (EU). It has the power to enforce EU competition rules on restrictive trade practices and abuse of market leadership when cross-border trade and competition are affected. Established on November 1, 1993, the European Union is a political and economic union of 27 member states. The EU was founded with the stated aim of enhancing social, political, and economic cooperation between its member states.
3] John Paczkowski, "Intel to Change "Sponsors of Tomorrow" Slogan to "Sponsors of the European Union"," http://ptech.allthingsd.com, May 13, 2009.
4] James Kanter, "Europe Fines Intel $1.45 Billion in Antitrust Case," www.nytimes.com, May 13, 2009.
5] Founded on January 1, 1930, Allen & Overy is a UK-based law firm.

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