Record antitrust fine levied against Intel

News like this may seem like it has little bearing on the way you use your computer (and even I debated a day over whether to write about it), but in the end, this is a big deal that could eventually have real impact on the way personal computers are bought and sold.

The news: Intel has been slapped with a 1.06 billion-euro fine over antitrust violations, the largest such verdict ever levied in the European Union. The largest fine before this one was less than half that amount, levied against Microsoft in 2004 and upheld even after Microsoft appealed.

The issue at hand involves a long-standing allegation of Intel paying computer manufacturers to include Intel chips in lieu of those made by competing manufacturers. This issue is often cited in discussions of Intel's rapid return to market dominance in recent years as it gobbled back the market share it lost to competitors during times when it was lagging in technological leadership.

Intel has long held fast that it does not and has not paid manufacturers to exclude other manufacturers' products from their lineups but does say that "we provide incentives to customers to buy our products." 

The courts so far seem to disagree with Intel's positioning on the matter, saying that the "hidden rebates" offered to Intel-only manufacturers amount to a "serious and sustained violation of the EU's antitrust rules [and] cannot be tolerated." Intel is of course appealing the verdict.

Meanwhile, Intel has been facing a similar investigation in the U.S. for years, and a civil suit filed by AMD in 2005 is headed to trial at last in March 2010. With the Obama administration stating it would be cracking down harder than prior administrations on antitrust issues, that's not very good news for the company, which has seen its stock stagnate since 2000 but which is still turning healthy profits every year. That could be squeezed if Intel actually has to pay out that billion -- more than a quarter of its profit last year -- and finds itself pressed in a more competitive marketplace.