The European Commission fined Intel a record 1.06 billion euros on Wednesday for abusing its dominance in the computer chip market to exclude its only serious rival, Advanced Micro Devices.

The European Union's competition commissioner, Neelie Kroes, said the penalty against Intel, the equivalent of $1.45 billion, was justified because the company had skewed competition and denied consumers a choice for chips.

Ms. Kroes said Intel had "used illegal anticompetitive practices to exclude its only competitor and reduce consumers' choice -- and the whole story is about consumers." She said Intel's practices had "undermined innovation."

The previous record fine for similar abuses in the European Union was 497 million euros imposed on Microsoft in March 2004 for blocking competition in markets for server computers and media software.

The fine is also the largest ever imposed for any breach of competition law in Europea, beating by a significant margin previous record amounts of hundreds of millions of euros levied on chemical and cement companies over the last decade.