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Intel to be Slapped with Greatest Fine in EU History

Discussion in 'News' started by btarunr, May 2, 2009.

  1. ArmoredCavalry

    ArmoredCavalry New Member

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    Free i7 raffles? Complements of Intel? :toast:
  2. smuggler New Member

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    Quite an argument going around about anti-competition law. Well not living in EU, but I should say that there is nothşng wrong with what they did and 1 or 2 billion € fines is not much when the effects of Intel's actions are calculated.

    EU makes more than 20 % of world market and taking into account the period Intel's anti-competitive actions continued it is just small enough like to get pinched by its mama.

    And why is it always big companies are fined in competition cases? Well this is microeconomics 101 issue. If a company is dominant seller in any market, it has the power to set the price. If there is a small competitor this big company I can kill the small company A in two ways 1- It can cut prices untşl the company A cannot keep up 2- it can make vertical agreements to prevent buyers to buy from company A. So Intel was abusing its market dominance ( 80 % market share is market dominance wherever you are in the world).

    EU fines smaller companies (smaller means not a monopoly but a oligopoly in the market) for making horizontal arrangements like fixing prices to maximize profit but you never here them because they are in markets not appealing as much as technology (bitumen, glass, chemicals etc)
  3. Mussels

    Mussels Moderprator Staff Member

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    As smuggler is hinting at, the laws are in place to prevent big business A from making business' B C D E and through to Z, kaput.

    If intel kept this price fixing up, AMD would go out of business and then there would be NO competition in the CPU market. see how much your chips cost then, without AMD to keep intel competitive.
  4. TreadR New Member

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    "the change in design means the old license doesn't apply, Intel believes" (bit-tech)
    That wasn't speculated in the cross-license... Intel made it up and frankly I don't give a flying f. how much money Intel put in QPI, so stop giving this argument... it makes you look lame.

    If it would have been specified in the license NV was given that it's valid only for Core platform, stating that clearly, would have given Intel the right to challenge it. Twisting the meaning that it's new and it doesn't apply... isn't much of a proof.

    In fact, there was no way a four-year-old cross license agreement (in march 2009) could have specified a 2007 rumored tech to make Intel's point valid!

    "though NVIDIA says it has been trying to resolve the problem with Intel in a "fair and reasonable manner" for more than a year." (electronista)
    This is what I'm referring to the QPI-SLI cross-license issue.

    Pity the fool that has no idea what a cross-license is.

    Sorry, I have to break the forum rules this time only... hopefully:
    IDIOT!

    And that's being sensible!

    "Intel claims that the statement given by Petersen was false because Intel believes that Nvidia doesn’t have a bus license for processors using an integrated memory controller.
    That's why NV called it QPI in the article you've mentioned it!
    Source (notice the date?): http://www.bit-tech.net/news/hardware/2009/03/27/nvidia-files-countersuit-against-intel/1

    Basically, Intel gave them a license for Intel chipsets, without a clear statement that it's not covering future "different" chipsets and that is a mistake on Intel's part as they should have limited the licensing terms properly.

    Besides, I feel sorry for you for trusting a MARKETING director. :roll:


    Right... Intel didn't want a 100$ chip on their mainboards, no matter by who they were manufactured because it would have hurt their overall Nehalem sales. But yeah... an Intel fanboy like yourself, can state that.


    I don't doubt your single-threaded neuron got lost! :roll:

    If NV won't be allowed to produce SLI QPI chipsets, as was stated on the more recent article on bit-tech, that would leave them with the only option to produce SLI chipsets for current gen platforms to stay in the chipset market... and the single viable platform is AMD.
    I said "stay" because the articles alredy mention that NV has nothing to add to the QPI tech besides SLI.
    Now, did you find yourself?


    Yeah kid... just believe that if it makes yourself feel better. :roll:

    Some people pointed you were wrong... you're just suborn and want it to be your way.


    True, they are in a critical financial state... but it's not over and in order to continue they need to increase their market absorption rate. This means less profits through low prices for now but more clients for the future which will help to be more competitive and to get more money from.

    Here's a piece of news regarding AMD's market share... for the better:
    http://www.techreport.com/discussions.x/16855

    Also I wouldn't say "always"... although I don't fully understand the part with obama. :wtf: but if it's related to what Swansen said next, I think I understand.

    smuggler, that's what people said already, TheGuruStud even gave up arguing... the arguments continue because of fbz that don't get what Intel did. Take a look at newtekie1... he was even given a proper explanation by twilyth, yet he still insists that Intel didn't do anything wrong.

    I guess we're back in the ages of Sparta... who shouts the loudest and the longest makes the point.
  5. crtecha

    crtecha New Member

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    1,000,000,000 EUR pshhhhhh pocket change for them :p
  6. Mussels

    Mussels Moderprator Staff Member

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    This threads getting pretty heated...
  7. twilyth Guest

    For those of you saying this is nothing for intel, howabout you send ME 16% of your after tax earnings for the year. After all, you won't even notice - right? :laugh:

    If you don't hit companies that break the law with fines that actually hurt, then they will just incorporate those fines into their cost of doing business.

    And Intel can't can't just raise their prices and pass it along since as of now at least they still have some competition. So this is going to come out of their pockets of their share holders.

    Intel should have realized that this type of an agreement would violate the law when they had a 80% market share. While this sort of thing is tolerated when done by smaller companies, there should have been no doubt it would be tolerated in Intel's case.

    Now let's just hope they get put in their place by the other countries investigating them. Total fines of a few billion $$$ ought to bring the message home. :nutkick:
  8. crtecha

    crtecha New Member

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    Greed sn a mofo. I guess thats why they say you cant have it all.
  9. FordGT90Concept

    FordGT90Concept "I go fast!1!11!1!"

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    Innocent until proven guilty.
    Crunching for Team TPU
  10. ArmoredCavalry

    ArmoredCavalry New Member

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    Yes, 16% of the average person's salary would be a big deal, however, Would Bill Gate's lifestyle be affected if 16% of his income was taken away? Prolly not. When you are talking about billions and billions of dollars, chances are it would not make/break Intel or affect them as much as an average person. In other words would you perhaps see some slowdowns in R&D... sure... would Intel shut down... no.... The effect that such a fine would have on Intel is totally dependent on how much of those profits they were putting back into the company.
    Tyr.1358 says thanks.
  11. Tyr.1358

    Tyr.1358 New Member

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    No offense, but who are you to say that Bill Gate's lifestyle would not be affected if 16% of his income was suddenly levied into a fine? Just because his earnings are larger than the average median income does not mean that his 16% is any less important than your 16%. The United States Census Bureau recommends that a mortgage represents 36% of your income. Food is 12%, Auto 12%, and the rest is divided into 5% slots for insurance, debt, investment etc. I guess the point is that he has significantly higher bills than someone with a median income, and it is immature to believe that his NSI (net spendable income) is worth less to him (because the figure is larger) than it would be to you.
    The same thing goes for Intel. If you think that there won't be any serious repercussions for them on the basis that they have the same operating cost as any other, smaller, company; then I might just call you ignorant. Intel has crazy operating costs to deal with compared to any other company with a smaller budget.
    Profits are not just expendable cash that you can throw around like your last paycheck of the month after your bills are payed. Intel invests their earnings in stock growth, R&D, and next year's budget. Their profits are also put back into the local economies to promote growth in their investment sectors: http://www.intel.com/community/. For example, they have a small facility in Marlborough, MA. I live not to far from there, and I can tell you that the entire town completely relies on regular support from Intel to stay afloat. They support a local trade school and promote growth throughout the entire industrial park. A good analogy would be how Starrett Tool in Athol, MA (pretty much a empty shell of the former company now) completely bankrupted the entire county when it went out of business last decade.
    Maybe I can break this down a little more. Private companies sell a product to make money. Public companies make money to sell a product. They are opposites, OK? The problem is that the product that public companies make is stock value.

    Companies make money by selling things. Companies sell a product at a price that covers their operating costs. Operating costs encase many things, including wages, taxes, electric bills, shipping costs, insurance, office supplies, company cookouts etc. So it is safe to say that any company will strive to sell their product. That is their goal, to create a large gap between operating costs and the revenue stream created by their product.

    Intel is on the stock market. Their product is stock, and anything that needs to be done to maintain that stock value can be legally considered an operating cost. Selling processors is just a way to increase stock value. In a public company, the stockholders come first; that means that in order to maintain investor relations they have to maximize their stock value. Microsoft, for example, sells stock. They increase their stock value by making operating systems. Coca-Cola increases their stock value by making beverages. Comcast increases their stock (advertising) value by selling groups of people who watch TV.

    To re-quote:
    The first thing Intel will do is raise their prices, because that is how you cover operating costs. <- You see that sentence right there? Damn that feels good.
    Last edited: May 6, 2009
  12. ArmoredCavalry

    ArmoredCavalry New Member

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    Are you joking? You really think that Bill Gate's lifestyle would be different if he had 16% less income??? You realize this is the Bill Gates of Microsoft we are talking about right?

    Also, the stats you are stating are AVERAGES. You think Bill Gates is paying 36% of his income towards a mortgage!? You realize how expensive his house would have to be if that were true??? If you think Bill Gates is even paying a mortgage at all, you need to wakeup. No offense :laugh: Also, if Bill Gates is paying 12% of his income towards his food bill, then I would like to know what is he eating... What, is he having baby seal steaks flown in daily from Alaska?! You would be hard pressed to spend more than a million dollars everyday on food...

    Also, I never said whether I think it is fair, or right that Intel is being fined, I am simply pointing out that there is no way this will make Intel go out of business, or anything that drastic.
    Last edited: May 6, 2009
    Tyr.1358 says thanks.
  13. Tyr.1358

    Tyr.1358 New Member

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    Gates' fortress is valued at 147 million dollars: http://en.wikipedia.org/wiki/Bill_Gates%27_house His estate is larger than most college campuses, and it's construction which started in 1988 was financed. There are a few small aerial photos here: http://www.propertyinvestmentproject.co.uk/blog/2008/01/02/bill-gates-house/

    $500k minus taxes =$360,331 x 12%= $43239.72 / 360 days = $120.11 a day for food. A bit off-topic, but my weekly grocery bill is about $90.

    Wake up call: Bill Gates' income is actually small, the 45 billion dollar figure from forbes (or wherever people get it) is an estimation of his net worth, which is based on the stocks he holds. He doesn't actually make a lot of money, sad but true. He owns billions of dollars of stock, however. If he needs money for things then he sells stock. Here is his income before the vista flop: http://answers.google.com/answers/threadview/id/543343.html

    Now, the taxes on his house alone are about a million dollars a year. He pays his bills by selling stock, he doesn't actually have a large income to cover his bills. That 500k a year goes towards his mercedes (or whatever he drives), the electric bill, and food. Just like you. What is more important to notice, is that his 500k a year is before taxes. After taxes his income comes out to $360,331.

    And while we are at it, the Gates Foundation doesn't donate money, they donate stock. The charity organization can then cash in that stock.

    In the USA, monopolies are disbanded by dividing the one large conglomerate into smaller independent companies. You can't do that with Intel because Intel does one thing: they sell processors. Sure, you could divide up the chipset business, but that wouldn't change anything. Even if you tried to make two smaller companies that sell processors out of Intel, how do you divide up the R&D? Who gets what technologies? I believe that is why our government hasn't stepped in, because there isn't a whole lot they can do.

    The EU solves this with a fine, but at what costs? Intel Corporation is not obligated to pay fines that are issued outside of America, where the company is based. The money will have to come from their European division/sector/sub company. That will bankrupt that market. What is worse, is the price hikes we worked out in my earlier post will be levied against the European market. You can't just slide money around from one company to another to cover costs. If that were possible then Ford Europe would have taken over Ford USA by now (a great idea actually).

    I suppose they could use the USA company to buy stock in the Euro market, which is called a "buyback". This would give the Euro sector enough money to cover the fine. The problem is that they would have to dilute the shareholder's earnings in the USA in order to buy the stock. This violates their goal, so it won't happen.

    The Euro sector will either go bankrupt, or be bought out/restructured.
    Last edited: May 6, 2009
  14. twilyth Guest

    I can't tell if you're being sarcastic or not. Intel is not yet a monopoly, therefore any increase in price means a decrease in sales - ceteris paribus. However Intel has very high fixed operating costs. So any decrease in sales pretty much comes out of the bottom line.

    Personally, I hope Intel does raise prices. It will give AMD that much more of an advantage. :nutkick:
  15. ArmoredCavalry

    ArmoredCavalry New Member

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    Yes, his "house" is huge and he OWNS IT. That is my point....

    Also, you are pointing out his SALARY FROM MICROSOFT. Not his income... :banghead: Someone who has a net worth as high as Bill Gates is obviously going to have lots of investments making lots of money. You think that Bill Gates could have that house if he was making only 500k a year, dream on. :laugh:

    It comes down to this, do you really think (as in your opinion) that Bill Gates is spending more than 83% of his yearly income (not salary) on goods/services?

    /end total thread derailment
  16. dr emulator (madmax)

    dr emulator (madmax)

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    god the lawyers always interfere why? it'll just be passed on to the customers anyway in the form of higher prices :banghead:i personally beleive we all have a choice as to which processor we buy nobody forces us to pay intel's excessive prices ,god knows theirs enough of e'm to choose from i'll more than like'ly be getting a i7 simply cause all my amd processors have had problems ,plus as my mate says it's about time ya bought a new computer and put that ancient thing out for the bin men:laugh:
  17. twilyth Guest

    I was thinking about a 920 myself, but and AMD 940 on an AM2+ board with low CAS DDR2 is probably bigger bang for your buck.

    If Intel does raise prices, AMD will be looking pretty sweet to a lot of end users.
  18. beyond_amusia

    beyond_amusia New Member

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    Intel can very easily discourage AMD chips by disallowing an Intel badge to be affixed to PCs and by refusing to pay for any advertisements for the OEM - The last thing Dell and HP would want is to pick up the whole tab for their commercials, and not have the 'Intel Inside' music chime in at the end of it. I've never seen a PC advertised on TV that bragged about using an AMD chip, and I bet it's because AMD cannot afford to pay for it.

    Now I am waiting for Apple to be brought to the chopping block of the great EU - As locked down as they keep their platform I am sure they've stepped on a lot of toes besides M$

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