Intel fined $26 million for Korean antitrust violations

The Korean Fair Trade Commission has fined Intel W26 billion (approximately $26 million) for its anticompetitive behavior some eight months after finding the company guilty of abusing its dominant market position. The penalty announcement wraps up the KFTC's three-year investigation into Intel's conduct; the CPU manufacturer has stated it is "disappointed" with the ruling and could appeal the case.

The KFTC's decision hinges on the aggressive/anticompetitive "rebate" programs Intel employed within the Korean market. According to the commission, Intel offered a total of $370 million dollars to Samsung Electronics and Trigem Computer between 2001 and 2005, on the condition that neither company buy processors from AMD. The KFTC further found that Intel's rebate program operated on a scale that ultimately blocked AMD from competing for OEM design wins, even if the smaller company made its CPUs available for free.

Thus far, Intel's response has been been a bog-standard rehash of Intel's firm commitment to business practices that are fair and pro-competitive. If that line is beginning to wear a bit thin, it's because we've heard it so often over the past three years. Korea is the second nation to rule against Intel in an antitrust investigation; Japan's Fair Trade Commission found similar evidence of monopolistic abuse back in 2005. Intel, thus far, has met every investigation and every finding with the same "We love fair competition" reply. Unfortunately for the chipmaker, regulators around the world aren't in agreement.

Japan and Korea are not the only places where Intel's actions are being scrutinized; both the EU and the state of New York are currently investigating allegations that the company has abused its market position. The EU decision is currently expected to arrive before the end of September; its findings (and potential penalties) could dwarf those of the Japanese or Korean FTC. The EU has the right to fine a company up to 10 percent of its annual revenue (maximum fine of €2.6 billion). Even if found guilty, Intel would almost certainly not be penalized so harshly, but the European Commission's decision to fine Microsoft some $800 million earlier this year is proof that the EC is willing to play hardball if it feels the situation warrants it.

The Korean FTC's decision will have no practical impact on the AMD-Intel antitrust case; AMD has already been barred from introducing international findings as evidence against Intel. The court of public opinion, however, operates under no such restriction. If—and I say "if" for a reason—the EU rules against Intel later this year, it could spur a fresh wave of investigations into behavior Intel steadfastly defends as being fair, procompetitive, and in the best interest of consumers.