( CNN ) -- The European Commission handed down its ruling in a landmark anti-trust case against Intel Wednesday , fining the computer chip giant a record $ 1.45 billion for abusing its dominant position in the computer processing unit ( CPU ) market . On Wednesday the European Commission fined Intel a record $ 1.45 billion for violating anti-trust laws . The ruling , which Intel plans to appeal , may have future implications for American companies accused of `` jurisdiction shopping '' to avoid anti-trust verdicts against them , says CNN 's Jim Boulden , who explains the basics of the Intel case . The commission has hit Intel with the biggest fine ever -- what were its reasons ? The European Commission says Intel has been abusing its dominant market position in semiconductors for years . The EC says Intel has systematically given PC makers and stores rebates to keep computers with AMD chips off the shelves . AMD ( another American company and Intel 's only competitor ) first raised the red flag in 2000 . Why does the commission have the power to impose such fines ? EU law does not regard market dominance as illegal , but it is allowed to fine a company that abuses its position as the biggest in any given market . It has a guideline of fining a company based on a percentage of profits . EU law is set up to `` protect consumers , '' and the anti-trust office says consumers were hurt . Yet as Intel likes to point out , consumers did not launch this case -- AMD , a competitor , launched this in Europe ( and in Japan and South Korea ) as the U.S. antitrust officials under George W. Bush were unlikely to pursue a case on these merits . The EU could fine Intel ( or any company ) based on 10 % of global annual revenues , but chose to fine it on a smaller percentage made in the EU . Can Intel afford to pay this fine ? What state is the company in at the moment ? Intel reported first quarter revenue of $ 7 billion . It can easily afford this . Interestingly , it lost 4 percent of its market share to AMD so far this year . The company says it will appeal -- when is that likely to be heard ? Another appeal will take months . Intel already appealed a preliminary part of this ruling last year and lost . Meanwhile , the EC can argue that Intel is still abusing its position and increase the fine during the appeals process , as it did to Microsoft . Intel is not the first tech company to be hit by the European Commission . What about Microsoft ? The anti-trust unit has launched another round of investigations against Microsoft . It has already paid its fine and the EU continues to watch the company 's behavior on the previous matters . What kind of precedent does the Intel case set ? The EU has fined all kinds of cartels and market abusers , but rarely does it fine big American companies based on complaints from American competitors -- so the case catches the eye , especially with critics who accuse American companies of `` jurisdiction shopping '' to get a favorable outcome .
European Commission fines Intel a record $ 1.45 billion for anti-trust violation . EC says Intel has been abusing its dominant market position . Comment: EC anti-trust has commenced another round of investigations into Microsoft .