Intel, the world’s largest computer chip manufacturer has been fined a record €1.06 billion (about $US1.45 billion) by the European Union (EU) for using illegal sales tactics to block rival Advanced Micro Devices Inc., (AMD) from the market.

According to the European Commission, the Santa Clara, Ca. corporation which controls about 80 per cent of the microprocessor market gave Acer, Dell, HP, Lenovo and NEC rebates for buying the company’s x86 central processing units (CPUs) and also paid them to stop or delay the launch of computers based on AMD CPUs.

According to the EU, Intel also paid the owners of MediaMarkt superstores, Germany’s largest electronics outlet, not to stock PCs based on non-Intel CPUs between 2002 and 2007.

EU Competition Commissioner Neelie Kroes said, “Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years.”

The penalty eclipses the previous record fine handed down by the European Commission against Microsoft Corp. last year when it slapped the software giant with a €899 million (about $US1.223 billion) fine for monopoly abuse.

Paul Otellini, Intel president and CEO, defended the company’s actions saying, “there has been absolutely zero harm to consumers.” He said Intel would appeal the EU decision but would comply with the order.

Giuliano Meroni, AMDs Europe president, hailed the decision by the EU and said the finding and penalty, “will shift the power from an abusive monopolist to computer makers, retailers and above all PC consumers.”