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Virtualization - South Korea Fines Intel; AMD Pops a Few Corks

Intel Fined $25.4 Million by South Korean Regulators for Abusing Its Dominant Position and Discounting Its Microprocessors

Intel has been fined $25.4 million by South Korean regulators for abusing its dominant position and discounting its microprocessors, thereby freezing AMD out of the market.

The charges relate specifically to $37 million in rebates awarded to Samsung and Trigem between 2002 and 2005 in exchange for not buying chips from AMD.

By 2005 Intel owned over 90% of the Korean market and the authorities claim AMD couldn’t have competed even if its chips were free.

The size of the fine is based on the revenues Intel was calculated to have derived. Intel has also been ordered to stop rebates.

Intel, which calls its tactics “the basis of competition,” is expected to appeal the ruling, which follows a three-year investigation and charges that the company violated antitrust laws.

Although it maintains that its business practices are perfectly legal, Intel has to worry that the decision will encourage the European Commission to come to the same conclusion as Korea and Japan.

The EC charged Intel with similar antitrust violations last year and could, if it was of a mind, fine the company up to 10% of its annual sales.

AMD, which filed a giant antitrust suit against Intel in the states, where federal antitrust authorities haven’t been interested in its complaints, will use the decision to substantiate its position – at least outside the courtroom.

AMD issued a statement saying the Korean Fair Trade Commission’s “decision against Intel for anticompetitive conduct continues a stark pattern: in every country around the world where Intel’s business practices have been investigated, antitrust regulators have taken action against Intel to protect consumers and the computer companies who serve them.”

In 2005 Japanese regulators accused Intel of anticompetitive practices and, although it disagreed, it took the exclusivity clause out of its contracts.

Intel is also being investigated by the state of New York.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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