After registering a small loss yesterday, U.S. stocks are little changed on Thursday morning, with the benchmark S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) down 0.18% and 0.17%, respectively, at 10:15 a.m. EDT. This morning's initial jobless claims figure from the Labor Department for the week ended June 7 will not contribute to volatility -- at 317,000, it is in line with the 309,000 consensus estimate. And speaking of figures, here's one that Intel (NASDAQ:INTC) won't like: $1.4 billion. That's the size of the fine the European Commission looks set to levy on the chipmaker.
Yesterday I highlighted the news that the European Union will open a formal investigation into Apple's (NASDAQ:AAPL) tax dealings in Ireland. Today it is Intel's turn to feel the wrath of European authorities.
In 2009, the European Commission accused of Intel of anti-competitive practices and abuse of its dominant position in offering computer manufacturers rebates if they sourced 95% of their processors from the U.S. chip giant. In punishment, the EU imposed a 1.06 billion euro ($1.4 billion) fine on Intel, the largest such penalty ever. The fine amount is equivalent to 4.2% of Intel's 2008 turnover, less than the maximum 10% the European Union could have demanded.
On Thursday, the European Union's General Court wholly rejected Intel's appeal of the penalty, opining that "none of the arguments raised by Intel supports the conclusion that the fine imposed is disproportionate," adding that the size of the penalty "is at the lower end of the scale" for such fines. Though large, the fine is not a significant wound in terms of Intel's financial position; the chipmaker earned $9.6 billion in profit last year.
Free-market enthusiasts will criticize the European Union for "meddling" in the affairs of companies in a competitive market and for being generals fighting the last battle. The second criticism is more legitimate: While Intel may be dominant when it comes to PC chips, it has not established the same position in mobile devices (U.K. company ARM Holdings controls the market for chip design in this segment).