May 13, 2009

BRUSSELS — The European Commission on Wednesday fined Intel a record of about $1.45 billion (€1.06 billion) for abusing its dominance in the market for computer chips to exclude Advanced Micro Devices, which is Intel’s only serious rival.

The E.U. competition commissioner, Neelie Kroes, said the penalty against Intel, the world’s largest chip maker, was justified because the company had skewed competition and robbed consumers of choice.

Ms. Kroes said Intel “used illegal anticompetitive practices to exclude its only competitor and reduce consumers’ choice — and the whole story is about consumers. ” She added that Intel’s practices “undermined innovation.”

The previous record fine for similar abuses in the European Union was €497 million, or $677 million at current exchange rates, imposed on Microsoft in March 2004 for blocking competition in markets for server computers and media software.

The fine also is the largest ever imposed for any breach of competition law in the E.U., beating by a significant margin previous record amounts of hundreds of millions of euros levied on chemical and cement companies over the past decade.

Ms. Kroes said Intel had pursued a strategy aimed mainly at excluding A.M.D. by paying computer makers and retailers to postpone, cancel or avoid A.M.D. products entirely.

She also ordered Intel to cease offering rebates to computer makers that had helped it maintain a share of about 80 percent of the market for microchip sales and blocked A.M.D. from increasing its share beyond about 20 percent of that market.