European Commissioner for Competition Neelie Kroes shows a computer chip at a news conference on Intel at the European Commission headquarters in Brussels May 13, 2009. [Xinhua]

The European Commission fined Intel Corp. a record 1.06 billion euros (US$1.44 billion) on Wednesday, saying the world's biggest chip maker illegally blocked out smaller rivals.

The fine exceeded a 899-million euro (US$1,220-million) monopoly abuse penalty for Microsoft Corp. last year. Intel called the decision wrong and said it would appeal.

The Commission, the executive arm of the European Union, said that Intel used illegal sales tactics to squeeze rival Advanced Micro Devices Inc. out of the market.

Intel, based in Santa Clara, California, has about 80 percent of the world's personal computer microprocessor market and faces just one real rival, AMD.

The Commission said the U.S. chip maker violated EU competition rules by exploiting its dominant position with a deliberate strategy to shut out AMD.

Intel was accused of blocking legal competition by giving rebates to computer manufacturers Acer, Dell, HP, Lenovo and NEC for purchasing all or almost all of their x86 computer processing units from the chip maker and paid them to stop or delay the launch of computers based on AMD chips.

Intel also paid Media Saturn Holding, Germany's biggest electronics retailer, to only stock computers that used its chips.

This meant workers at AMD's biggest European plant in Dresden, Germany, could not buy AMD-based personal computers at their city's main PC store.

"Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years," said EU Competition Commissioner Neelie Kroes. "Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated."

EU regulators said the fine was calculated on the value of Intel's European chip sales over the five years and three months that it broke the law.

(Xinhua News Agency May 13, 2009)