Intel could face largest ever European Union fine

Intel is under investigation for anti-competitive practices

Analysts are forecasting that Intel could face the largest fine in European history, if found guilty of anti-competitive practices by the European Union.

The EU is currently investigating the chip giant over anti-competitive practices, including offering discounts to manufacturers for using Intel chips, as well as encouraging them to not use hardware from rival AMD.

"I would be surprised if the fine isn't as high or higher than in the Microsoft case," Howard Cartlidge, head of the EU competition group at law firm Olswang in London, told The New York Times.

"Technology markets are where the European Commission has perceived particular problems due to dominant companies."

Legal analysts estimate that the fine could exceed €1bn, well above the €497m fine levied against Microsoft.

Intel has already been found guilty of anti-competitive practices in Japan and Korea, and now faces investigations by the EU and the US Federal Trade Commission.

In the EU case, the company insists that it has done nothing wrong and is confident of being proved innocent. "Overall, Intel's conduct is lawful, pro-competitive and beneficial to consumers," said Intel spokesman Robert Manetta.

However, AMD begs to differ. Senior sources within the company say that Intel has been conducting anti-competitive practices to maintain a dominant 80/20 split in market share that has not changed in years, despite modifications in technology.

AMD pointed out that, even when Intel misjudged the market with the introduction of the poorly received Itanium, and AMD's Opteron had a clear run at the server space, the relative market shares barely changed.

AMD contends that Intel uses subsidies to make sure manufacturers use its chips and ignore the competition.

The sources cited a comment by HP director Tom Perkins that came out during the HP spying scandal. Perkins said that "Intel might be kicking the cr** out of us," which AMD takes to relate to HP's decision to use more AMD processors.