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As EU launches probe into Apple's taxes, Intel slapped with record $1.4B anti-competition fine

Apple partner Intel attempted to appeal a $1.44 billion fine from the European Union for unfair business practices, but the chipmaker lost that bid on Thursday when a court determined that the record fine would stand.

European Commission HQ


The European Commission, which is the legislative arm of the EU, originally handed down its decision against Intel in 2009. Intel hoped it could reverse the ruling and perhaps lessen its fine, but according to Reuters Europe's second highest court found that the regulators were within their rights to hit the company with a 1.06-billion-euro loss.

The original 2009 decision found that Intel used anticompetitive practices against rival AMD. In order to keep its dominant position in the PC market, Intel gave rebates to Windows partners including Dell and HP, and the chipmaker also paid at least one retail chain to stock only computers running on Intel chips.
The European Union's $1.44 billion fine is in response to what it found to be anticompetitive practices by Intel.
In addition to running in most Windows PCs, Intel also makes all of the processors found in Apple's current Mac lineup.

The commission arrived at the amount for its fine by making it equal to 4.15 percent of Intel's 2008 turnover. The company had faced a possible maximum of 10 percent.

The decision to uphold Intel's fine from the organization comes as the European Commission has announced that it has set its sights on Apple, formally declaring an investigation into the company's use of Ireland as a tax shelter. The EU has questioned whether Apple is paying its fair share of taxes in Europe, and plans to examine individual rulings issued by Irish tax authorities regarding taxation of Apple's Ireland-based companies: Apple Sales International and Apple Operations Europe.

Ireland is known for having tax laws that are beneficial to multinational corporations, allowing them to see effective tax rates of less than 2 percent by moving their profits to affiliate corporations in the country. Other tech companies known for utilizing Ireland's laws are Microsoft, Facebook, and Amazon.

After the investigation into Apple was announced, the company responded this week and denied dodging EU tax laws or receiving special treatment from Irish authorities. The iPhone maker said it "pays every euro of every tax" that it owes.