Thursday, May 14th 2009

AMD Comments on EC Ruling that Intel Violated EU Law, Harmed Consumers

The European Commission today found Intel guilty of abusing its dominant position in the global x86 microprocessor market, saying that “Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. Such a serious and sustained violation of the EU’s antitrust rules cannot be tolerated.” The Commission also stated that “there is evidence that Intel had sought to conceal the conditions associated with its payments.” The EC decision requires Intel to change its business practices immediately and fines Intel a record EUR 1.06 billion (US $1.45 billion).

“Today’s ruling is an important step toward establishing a truly competitive market,” said Dirk Meyer, AMD president and CEO. “AMD has consistently been a technology innovation leader and we are looking forward to the move from a world in which Intel ruled, to one which is ruled by customers.”

“After an exhaustive investigation, the EU came to one conclusion – Intel broke the law and consumers were hurt,” said Tom McCoy, AMD executive vice president for legal affairs. “With this ruling, the industry will benefit from an end to Intel’s monopoly-inflated pricing and European consumers will enjoy greater choice, value and innovation.”

The EC decision stated specifically that:
  • “Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel”.
  • “Intel made payments to major retailer Media Saturn Holding from October 2002 to December 2007 on condition that it exclusively sold Intel-based PCs in all countries in which Media Saturn Holding is active.“
  • Intel “interfered directly in the relations between computer manufacturers and AMD. Intel awarded computer manufacturers payments - unrelated to any particular purchases from Intel - on condition that these computer manufacturers postponed or cancelled the launch of specific AMD-based products.”
Intel has so far failed to convince any antitrust enforcement agency that its business practices are lawful and pro-consumer.
In 2008, the Korea Fair Trade Commission (KFTC) issued a 26 billion won fine (approximately $25.4 million USD) saying that Intel’s abuse of its dominant position included coercing and paying customers millions of dollars on the condition that they use only Intel chips, delay launches of AMD products, and/or not develop any new products with AMD chips. The KFTC also found that, “South Korean consumers had to buy PCs at higher prices as domestic PC makers were forced to buy Intel’s pricier CPU.” In addition to a fine, the KFTC ordered Intel to stop the practice of offering payments to PC makers conditioned upon them not doing business with AMD. Intel is in the process of appealing the ruling.

In 2005, the Japan Fair Trade Commission (JFTC) ruled that Intel had violated the country’s anti-monopoly laws by illegally forcing full or partial exclusivity with five Japanese PC makers. Intel did not appeal the ruling.

In the United States, the U.S. Federal Trade Commission (FTC) and New York Attorney General’s office are investigating Intel for abuse of its monopoly position. In 2005, AMD filed private litigation in the US District Court of Delaware, which is scheduled for trial in spring 2010.Source: AMD
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104 Comments on AMD Comments on EC Ruling that Intel Violated EU Law, Harmed Consumers

#1
newtekie1
Semi-Retired Folder
If AMD wants a competitive market, they should really work on actually making competitive products. I know they can, I've seen them do it...
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#2
h3llb3nd4
Exactly:)
"real men use real cores" aint working for them at all...
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#3
TheMailMan78
Big Member
by: h3llb3nd4
Exactly:)
"real men use real cores" aint working for them at all...
What EXACTLY is wrong with their marketing?

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#4
cdawall
where the hell are my stars
maybe this will lower some EU prices on both AMD and intel
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#5
btarunr
Editor & Senior Moderator
by: newtekie1
If AMD wants a competitive market, they should really work on actually making competitive products. I know they can, I've seen them do it...
They tried, between 2001 and 2006, but couldn't dent Intel's market share the way its products should have been able to. AMD did everything right, including aggressive marketing. Yet because Intel corked the OEM segment, AMD couldn't do much but to cry foul. That paid off yesterday, and the numerous anticompetition trials in the past.

edit. not just yet. AMD stock dipped against Intel's growth.
Posted on Reply
#6
1Kurgan1
The Knife in your Back
by: h3llb3nd4
Exactly:)
"real men use real cores" aint working for them at all...
You might want to pay attention to stocks. AMD took back a massive share on the market in Q1. The PII lineup is very good, HT is awesome in the i7 lineup, no doubt. But when it comes to anything else the PII's hang right with them, even the tri-cores do in gaming at a much better price point.
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#7
erocker
What's awesome about all of this is that the consumer is the one that will have to pay higher prices for processors. No company run properly will just eat up the fine. Thanks EU!
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#8
h3llb3nd4
by: 1Kurgan1
You might want to pay attention to stocks. AMD took back a massive share on the market in Q1. The PII lineup is very good, HT is awesome in the i7 lineup, no doubt. But when it comes to anything else the PII's hang right with them, even the tri-cores do in gaming at a much better price point.
That's another problem:( I'm too young:P
Posted on Reply
#9
TheMailMan78
Big Member
Just so you guys know. AMD is still in trouble.
Look at this from today 2:52pm Eastern.....
Posted on Reply
#10
cdawall
where the hell are my stars
by: h3llb3nd4
Exactly:)
"real men use real cores" aint working for them at all...
so i work at bestbuy and if you look at machines that come into GS to be fixed (poor people) intel to amd is 10:1 there are so many P4 530 and P4 640 etc that come in an a64 is rare so rare in an OEM PC
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#11
erocker
by: TheMailMan78
Just so you guys know. AMD is still in trouble.
Look at this from today 2:52pm Eastern.....
They aren't in trouble. One day doesn't reflect market share. They are up double what they were a few months ago. AMD actually looks very promising right now with their new foundaries and is a great time to buy their stock. Then again I bought their stock when it was at 11.. lost a lot of money... damn Phenom I....
Posted on Reply
#12
W1zzard
can anybody explain what a "hidden rebate" is ? if you pay less it's a rebate, since you have more money on your bank account how can it be hidden? if you wouldnt know about it there would be no rebate?
Posted on Reply
#13
DaC
Holding only 20% of the market makes things much harder to amd....... even by the time AMD had A64 x2 and intel only had P4 / HT ) which was way way way worse on performance/energy difference than i7 is to P2 now, even so AMD didn't caught more than 20% of the market according to the whole thing....
I don't get why all intel fanboys are just pissed with this EU fine....
I own intel myself two Q6600 rig and also one 9950 BE rig.... so I take no sides on love about brand (although I'd like to see AMD going up even more, so we can have real competition).

Just imagine... you have 80% of the market...... suppose 50% from this 80% goes for research..... so... 40% of every cpu sold goes into intel for research of new tec., while keeping the same ratio, only 10% goes for amd research tec..........
See guys... get my point: Intel can, by doing this, maintain 4 (four... I said four), AMD researches at a time, Intel should do in 1 year what AMD would do on 4 (supposing everything is linear, of course)........ but even so i7 isn't close to be 4x better than Phenom II (supposing both started being developed at the same time).................
But it just doesn't stop right there..... things are even worse..... because, even if the "4x times more money" intel has to research fail..... Intel, even so, would still hold 80% of the market (P4 / HT remember ?)..........
Where is the competition ? It's like you're racing, but on this race no matter what you do, you will still be 80% behind the BigGuy, always. Because the BigGuy paid for a bunch of other BigButSmallersGuys to hold you back. So Is it your fault for not having money to pay BigButSmallersGuys to hold the Big Guy also ? I guess not.

I'll take AMD side on this, for sure. Taking Intel side is just illogical.
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#14
TheMailMan78
Big Member
by: erocker
They aren't in trouble. One day doesn't reflect market share. They are up double what they were a few months ago. AMD actually looks very promising right now with their new foundaries and is a great time to buy their stock. Then again I bought their stock when it was at 11.. lost a lot of money... damn Phenom I....
Dude I bought it when it was 14.8. :laugh: Look at the chart. Thats a 2 year spread. :cry:

HOWEVER I aint selling it until I make my money back.
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#15
DaC
by: W1zzard
can anybody explain what a "hidden rebate" is ? if you pay less it's a rebate, since you have more money on your bank account how can it be hidden? if you wouldnt know about it there would be no rebate?
I guess it means the manufactures got the rebate from Intel but weren't supposed to make it to the consumer or if the manufacture gave the rebate to the consumer it wouldn't come from his pocket, but Intel.... and as it's a rebate it isn't a price drop, just a refund offered if some conditions are filled.
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#16
cdawall
where the hell are my stars
by: W1zzard
can anybody explain what a "hidden rebate" is ? if you pay less it's a rebate, since you have more money on your bank account how can it be hidden? if you wouldnt know about it there would be no rebate?
manuf gives rebate to buyer without consumers knowing it.

AMD did it to HP with the G60 series.
GM does it with its dealers.
Posted on Reply
#17
btarunr
Editor & Senior Moderator
by: cdawall
manuf gives rebate to buyer without consumers knowing it.

AMD did it to HP with the G60 series.
GM does it with its dealers.
No manufacturer will disclose to the end user what prices he is buying raw materials at.
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#18
DaC
by: erocker
What's awesome about all of this is that the consumer is the one that will have to pay higher prices for processors. No company run properly will just eat up the fine. Thanks EU!
Hey erocker, sorry but I'll have to disagree with you.
No consumer will pay this fine.
In a free market it's the competition that sets price, not a company.
Ok, intel got fined, so what ? Will it raise prices from i7 ? Hell no! If it does that, they're doomed, because P2 prices won't go higher.... will it be less competitive ? It just won't be able anymore to lunch a $1000.00 cpu soon.
My 2 cents:

If intel is really pissed about that, they will invest even more on research so they can smash AMD with their new tec, and not by paying for oems to do that......

Don't worry i7 and p2 prices will go down as usual, your life won't change, but regular consumers (95% of consumer cpu market maybe?), will have more AMD than before on their houses, and for us, enthusiasts, nothing will change for now, but in the future it will, we will have better tec at better prices.......
Think about it, no company can revenge fines on consumers as long as competition exists.
Posted on Reply
#19
KieranD
consumer choice should rule a market

this is exactly what wasnt happening, intel was choking the market with secret rebates and incentives to not stock competitors products

you cant go around doing this

intel OWNS the oem sector its like do you see an amd machine in my college nope, did i see an amd dell in the high school i went to nope

they broke EU laws so they need to pay the price, they make like enuf in one year to cover that fine
Posted on Reply
#20
mdm-adph
by: newtekie1
If AMD wants a competitive market, they should really work on actually making competitive products. I know they can, I've seen them do it...
You're kidding me, right? Yeah, sure they can make competitive products -- we've all seen them do it.

That's not even the issue here.

The problem is that Intel was threatening companies with a virtual "busting of the kneecaps" were anybody to buy from AMD.

Though, if you're like a few "Gordon Gecko"-esque posters here on this board, you probably see nothing wrong with that, since "might makes right." :shadedshu
Posted on Reply
#21
Steevo
by: W1zzard
can anybody explain what a "hidden rebate" is ? if you pay less it's a rebate, since you have more money on your bank account how can it be hidden? if you wouldnt know about it there would be no rebate?
Lest say you have a website that generates income by reviewing hardware, and ad placement.



I am the supplier of your hardware for review, and I give you the hardware for a nominal price and you are free to sell it after, but only as long as you give me a positive review, and only review products I OK.


Now leats say that another company wants to have you review their hardware, I learn of it and tell you that I will give you the hardware for free, and provide a vacation for your family and trips to my events for free. Hell, I will buy you a condo and a new car.

If the other company matches it to a reasonable point, I tell you that if you review their hardware in a favorable light compared to my hardware I will take everything away and put you in a bad light, make you pay full price for your review hardware and trash your name.


Would this be OK with you, after all, I am only trying to keep money in my business.
Posted on Reply
#22
TheLaughingMan
It is a nice way to say Kick-back

by: W1zzard
can anybody explain what a "hidden rebate" is ? if you pay less it's a rebate, since you have more money on your bank account how can it be hidden? if you wouldnt know about it there would be no rebate?
What they did was not a "rebate". What they would do is tell the company that they would buy the products up front for lets say $100. Then Intel promises to give you back $25 is a less than legal manner. You then have records showing $100 per chip, but you only paid $75. Then you fill taxes against you and use the now "inflated" price to make your business more money in taxes and charging vendors more than they should have paid because it "cost you so much".

The people who made this practice famous were corrupt politicians and the Mob.
Posted on Reply
#23
cooler
by: newtekie1
If AMD wants a competitive market, they should really work on actually making competitive products. I know they can, I've seen them do it...
yes I couldn't agree more:shadedshu

but the problem is by INTEL practice AMD could not gain any market even went they have a good product
AMD loses billion worth damage by this

AMD will have money to develop thing faster
we could have being using fusion by now if not for intel :banghead:
Posted on Reply
#24
Imsochobo
by: TheMailMan78
Dude I bought it when it was 14.8. :laugh: Look at the chart. Thats a 2 year spread. :cry:

HOWEVER I aint selling it until I make my money back.
That happens, amd is cutting it's losses, getting better than expectations results, and ati is making money now(1 million lol) anyways.

AMD was at 40 bucks per share, was down at sub 2 dollar (1.53 i think) and now back at 4.24 checked 22:50 CET (1+GMT)

They've had a high of 4.3-4. they just gotta keep in the game like they do now, and do the bulldozer right!
Posted on Reply
#25
JATownes
Intel has CLEARLY engaged in anticompetitive behavior for YEARS. This is no different than M$ "owning" the OEM OS market. Everyone here will agree that M$ is anticompetitive, and has tried to squash every other OS manufacturer, and we all rejoice when they are slapped on the hand. This is the exact same situation. AMD is an amazing company, that slapped intel in the face a few years back, bringing a superior product and a lower cost. If Intel would not have choked AMD out of the OEM market, we would probably see better products from both companies today. (Intel because they were threatened, AMD because more market share = more cash for R&D). My 2 cents.

I think Intel is an awesome company. I also think AMD is amazing. There is enough in the OEM PC market to support both, so I wish they all could play nice. I teach my 4 year old to share for the good of the group, but I guess the corporate world never learned that.

FREE MARKET IS WHAT MAKES INNOVATION POSSIBLE!!!
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