Monday, May 11th 2009

EU Completes Intel Antitrust Case Investigations, Likely to Find it Guilty: Sources

The European Union trade regulatory body is expected to announce its verdict on the high-profile antitrust case against Intel on Wednesday. The company has been booked under charges relating to market malpractice, by influencing computer hardware manufacturers to postpone and/or cancel launches of their products that use CPUs made by its rival AMD. Intel allegedly abused its market position in the CPU industry, to cripple the growth of AMD in Europe, by offering special rebates to computer hardware manufacturers to restrict or eliminate the use of AMD processors. The company allegedly even influenced retailers by offering inducements to sell computers only with Intel processors installed.

The first violation by Intel is that it allegedly set set percentages of its own chips that it wanted PC makers to use, according to sources. Examples include NEC, which was told that only 20 percent of its products could use AMD processors. All Lenovo-made notebooks use Intel processors, while 95% of HP's product-line features Intel processors, sources said.

The second violation was where Intel bribed PC makers to delay or scrap the launch of their products that feature AMD processors, to favor Intel best. The Commission will characterize the payments as "naked restrictions" to competition, the sources said.

When found guilty, the commission will take two forms of action against Intel. A date will be set, following which, Intel cannot offer the rebates and other inducements EU finds illegal. A fine will also be collected from Intel. The commission can charge as much as 10% of Intel's annual revenue as fine, which was $38 Billion in 2008. The trade commission's decision set for Wednesday is said to be extremely complex and lengthy, in order to safeguard the antitrust enforcer against any possible legal challenges from Intel, which is likely to face one of the highest fines in Europe's antitrust history, according to Brussels-based lawyers. Intel's trouble in Europe began in 2000, when AMD complained that Intel was blocking its access to the European market.Sources: Reuters, The Wall Street Journal
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82 Comments on EU Completes Intel Antitrust Case Investigations, Likely to Find it Guilty: Sources

#1
lemonadesoda
The trade commission's decision set for Wednesday is said to be extremely complex and lengthy in order to safeguard the antitrust enforcer against any possible legal challenges from Intel
Oh, how very EU bureaucratic.

Laws should be simple. Judgement should be simple. A one thousand page document of complex legal "self-protecting" bureaucracy should, IMO, not be allowed. The EU is beginning to crush itself under it's own weight of legal and tax rules. But the first to suffer is anyone, or any company, that has to fight against it's omnipotent judgements.

Intel may have done something incorrect, but this whole process is wrong. And 105 of annual revenues? What nonsense. How is that related IN ANY WAY to the economics of the situation.
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#2
FordGT90Concept
"I go fast!1!11!1!"
As I said in the other thread. Intel will have to pay the EU regardless of whether they commited any crimes or not. EU wants money, they get money. EU = modern mob.
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#3
lemonadesoda
As an EU citizen and taxpayer, i find this whole situation lamentable. (Not just the intel case, but the ever increasing levels of bureaucracy, legal complexity, and small enterprise road-blocking taxation systems that exit in EU).

The EU is ruled by bureaucrats and lawyers that are able to make ever more work for themselves and their ilk... with one single objective... so syphon off the productive labours of enterprise into the coffers of the quasi-govt institutions.
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#4
AlienIsGOD
IMO its never really stopped Intel before. They get sued, pay up, and go on about their business. The EU, im from canada so i don't kno much about that.
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#5
laszlo
i know is hard to eat this for intel fans but sadly is true;intel way of business has send amd back with years because they can't sell product=no money;amd presence has achieved the low prices on the present market ... even for intel products
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#6
adrianx
As an EU citizen and taxpayer

if intel dont respect the law ... must pay... :)

show me the money :) (in console) :)
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#7
mtosev
you pay taxes to your country and not to the EU directly.
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#8
morpha
ALL of the big companies cheat in business in some manner. And everytime they are found guilty, pay up, and then just keep doing it.
They do it with the full understanding that they will have to pay up and so they factor it into their budget before they even begin.

The government doesn't want it to stop, because they can keep making money from them every few years for more and more money. If they wanted it to stop they would just revoke their right to market in that country.
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#9
alexp999
Staff
by: mtosev
you pay taxes to your country and not to the EU directly.
You get taxed by your country, EU taxes your country.

Money has to come from somewhere :)
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#10
TheMailMan78
Big Member
As a longtime AMD supporter and fanboy I say this.....

To hell with the EU Intel. Keep making awesome CPUs. They don't like it then don't sell it to them. :rockout: I may buy Intel next time just to spite the EU.
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#11
iStink
This stinks (and I know stinky ;))

If Intel did something wrong, ok, they should pay up, but who's gonna get that money? Will AMD see a dime of the money paid?
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#12
Flyordie
So essentially you all are saying this...
Intel deserves to be the only X86 CPU maker. Had the market ratio been CORRECTLY and LEGALLY done... Think of how good the Phenom II could have really been. Think about how much more AMD could have improved with the R&D Dollars...


ALSO- Its EU regulation that 60% of the damn fine goes straight to AMD's coffers.... so shut up about "Oh EU needs money... they are the mob" crap.
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#13
Bl4ck
that's what you get when so called "free market" is build, Banks go bankrupt ,ppl loose their jobs, and corporations pay ppl to buy their inferior technology /and not to buy the competitive products in the same time. Good Job EU , Intel made large piles of cash that way, it's time for them to cough it up.
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#14
Triprift
Errr since the Core 2 duos came out Amd has had to play cach up and i dont its anything to do with this admit it the origanal Phenom launch was a disaster and the cpu's wernt much better.
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#15
Bl4ck
by: Triprift
Errr since the Core 2 duos came out Amd has had to play cach up and i dont its anything to do with this admit it the origanal Phenom launch was a disaster and the cpu's wernt much better.
the lawsuit goes since 2000, and back then intel had "second place" , they bribed the other companies to buy their products and not AMD's.
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#16
FordGT90Concept
"I go fast!1!11!1!"
AMD isn't the only x86 manufacturer out there. There's also Via...

AMD/Via should be filing these lawsuits, not a government body. The only exception is, for instance, Rockefeller's Standard Oil where there was no competition (Standard Oil bought it all). When a government goes for anti-trust, they really can't lose. This is why anti-trust lawsuits by a government body should be the exception, not the norm.
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#17
Triprift
Im just saying you dont get the market share Intel have just by that the products themselves are a big factor as well.
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#18
FordGT90Concept
"I go fast!1!11!1!"
Don't forget that AMD and Via are both profiting from Intel's technology. Intel is entitled to as much of that pie as they can get.
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#19
WarEagleAU
Bird of Prey
I always wondered why AMD, even though they made chips for Intel, why they didnt get with IBM to license the X86 technology, or was Intel with it back then as well?

Also, as much as Id like to see intel punished, AMD hasnt done enough to sell its processors either. I am not saying they should be shady or anything, but they need to get their name out there more. This is coming from one huge ass AMD Fanboy
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#20
FordGT90Concept
"I go fast!1!11!1!"
IBM required two suppliers for everything. In order for Intel to sign on the IBM-PC contract, Intel had to license x86 to AMD. I doubt IBM has an x86 license themselves.
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#21
silkstone
I've seen this sort of thing before. The big companies just demolish the competition because they have more money and don't even give the starter company a fighting chance. A huge company like Intel is able to take a big cut in profits without a problem, when they get rid of the competition or reduce it's market share they hike prices all the way up to cover those earlier losses, in the end it's the consumer that ends up loosing out.
Well done EU
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#22
mdm-adph
by: FordGT90Concept
When a government goes for anti-trust, they really can't lose. This is why anti-trust lawsuits by a government body should be the exception, not the norm.
Except when the administration changes before the ruling has been enacted, and nothing really happens in the end. (See United States v. Microsoft, 1998-2000)
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#23
HTC
by: Flyordie
So essentially you all are saying this...
Intel deserves to be the only X86 CPU maker. Had the market ratio been CORRECTLY and LEGALLY done... Think of how good the Phenom II could have really been. Think about how much more AMD could have improved with the R&D Dollars...


ALSO- Its EU regulation that 60% of the damn fine goes straight to AMD's coffers.... so shut up about "Oh EU needs money... they are the mob" crap.
I think their CPUs would have been more expensive because they wouldn't need to have lowered their prices as much as they did in order to sell their CPUs.

With more money, AMD could have made a better line of CPUs and, with them, giving Intel a run for their money on the CPU market.

Because of this, Intel didn't lower their prices as much as they would and ended up charging more for their CPUs, which made them much more $$$ then the fine's value, IMHO.

This is why i think Intel isn't getting hit hard enough with this fine. On top of that, only 60% of the fine will go to AMD? :eek:

EDIT

If AMD had managed to make a better line of CPUs, by competing on a more equal level with Intel, their prices could still have dropped as much as they did: the difference is that Intel's prices would have dropped as well.
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#24
Paintface
proud to be a european AMD user :cool:
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#25
FordGT90Concept
"I go fast!1!11!1!"
by: mdm-adph
Except when the administration changes before the ruling has been enacted, and nothing really happens in the end. (See United States v. Microsoft, 1998-2000)
That's an example of an anti-trust case done right. Microsoft was not buying up competitors so there was really no grounds to fine them (you can't fine someone for being good or trying to nudge customers in your direction). All the ruling did was require Microsoft release an API for IE.

This article describes my stance rather well:
http://www.cato.org/pubs/policy_report/v21n2/cpr399.pdf
Now we come to Silicon Valley and Microsoft. I am not going to argue about the technical aspects of whether Microsoft is guilty or not under the antitrust laws. My own views about the antitrust laws have changed greatly over time. When I started in this business, as a believer in competition, I was a great supporter of antitrust laws; I thought enforcing them was one of the few desirable things that the government could do to promote more competition. But as I watched what actually happened, I saw that, instead of promoting competition, antitrust laws tended to do exactly the opposite, because they tended, like so many government activities, to be taken over by the people they were supposed to regulate and control. And so over time I have gradually come to the conclusion that antitrust laws do far more harm than good and that we would be better off if we didn’t have them at all, if we could get rid of them. But we do have them.
If AMD were being sued by the EU for anti-trust, I'd be every bit as angered by it. If you aren't guilty of directly eliminating competition (see Stardard Oil and US Steel), you don't deserve to have a government breathing on your neck.
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