Wednesday, May 13th 2009

EU Fines Intel a Record €1.06 Billion in Antitrust Case

Following the news we covered the other day, the verdict is now in, and as expected Intel has been found guilty and fined €1.06 Billion ($1.45b/£948m) by the European Commission for anti-competitive practices. This fine smashes the €497 million fine issued to Microsoft by the EU in 2004 for abusing its dominant market position. Nine years on from when AMD first made a complaint that Intel had paid computer manufacturers not to use AMD chips in Europe the EU have ruled that Intel had given rebates to manufacturer's if they only used their chips, and had also found that a retailer had been paid to sell only Intel based systems.
"Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years," said Competition Commissioner Neelie Kroes, "Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated."Source: BBC
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77 Comments on EU Fines Intel a Record €1.06 Billion in Antitrust Case

#1
derFeef
Mussels said:
now now, please dont go calling him a fanboy.

He's stated clearly, that while he doesnt think intel was correct its just ONE of the things, he sees nothing wrong with.
I know I know, I am not serious... not 100%
Posted on Reply
#2
alexp999
Staff
I'm in no way a fanboy, I have had equal amounts of setups from different chip manufacturer's, Intel, AMD, NVIDIA, ATI, etc.

In fact I really want AMD to come up with something to beat the i7/i5. Cus I'm board with Intel :)
Posted on Reply
#3
Paintface
thats a billion euros of US intel enthousiasts cash being spent on subsidizing the AMD plant in Dresden :D

Good news altogether, the hard hand of European socialists hurts for those who break the laws!
Posted on Reply
#5
DareD
Just read the REAL full news about it. This link was already posted:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/745&format=HTML&aged=0&language=EN&guiLanguage=en
Everything is explained understandably!
In its decision, the Commission does not object to rebates in themselves but to the conditions Intel attached to those rebates. Because computer manufacturers are dependent on Intel for a majority of their x86 CPU supplies, only a limited part of a computer manufacturer's x86 CPU requirements is open to competition at any given time.

Intel structured its pricing policy to ensure that a computer manufacturer which opted to buy AMD CPUs for that part of its needs that was open to competition would consequently lose the rebate (or a large part of it) that Intel provided for the much greater part of its needs for which the computer manufacturer had no choice but to buy from Intel. The computer manufacturer would therefore have to pay Intel a higher price for each of the units supplied for which the computer manufacturer had no alternative but to buy from Intel. In other words, should a computer manufacturer fail to purchase virtually all its x86 CPU requirements from Intel, it would forego the possibility of obtaining a significant rebate on any of its very high volumes of Intel purchases.


What Intel done is totally wrong - even the rebates because of their conditions!
Posted on Reply
#6
animal007uk
As far as im concered intel deserve everything they get, many a time in the past i have wanted to go out and buy an AMD cpu only to be told sorry we only stock intel, when asked why they only stock intel i was told its because of agreements with them.

funny thing is over the years all intel shops round by me have gone and most of the places i goto sell more AMD cpu's now than intel.

i now use an intel pc and while the cpu is supose to be fast and cost a lot more than my old amd i realy can't notice any diffrence apart from the price. (intel cpu £109) my slower AMD about £45 but runs just as good for me.

so yeah intel deserve all they get as 1. there a rip of anyway 2.only some ppl find there cpu a lot faster (usualy the ppl who have the money to waist on a £400 cpu)

each to there own tho i hate intel always will and if i had the cash i'd go back to AMD anyday.
Posted on Reply
#7
tkpenalty
Please read alexp999...

I really think those people who oppose the EU's ruling should be a bit more empathatic to the consumer, and other corporations which have almost no chance of breaking into the market.

Do you think its fair to pay manufacturers, to NOT use your competitor's products? I'll use an analogy; music artists. They NEED record labels just to get their music to the consumer, and the same goes for CPU manufacturers. If Musician A decides to pay a hefty sum of money to prevent Musician B from being accepted by the music label, due to a rivalry, or a fear of losing sales, do you think thats fair? Hell no and it can land you in strife for bribery. Now lets apply it to this court case; intel has basically bribed manufacturers.

If the EU were truly a bunch of morons who wanted only money, they fine intel enough to cause damage to them, probably half of their assets. However they aren't and understand that killing off Intel (i.e. jailing, etc) would cause much strife to the IT industries around the world.
Posted on Reply
#8
Sihastru
So, every exclusivity contract that is in effect now or will be in the future is in fact an illegal contract. Every rebate that someone gets because they made a choice to remain exclusive is illegal.

So Sapphire, exclusively manufacturers ATi cards is in fact on the wrong side of the law. Don't tell me that they are exclusive just because they are in love with ATi. They get certain benefits.

Every exclusivity contract entails (visible or hidden) benefits. Wake up and smell the bullshit. It's common business practice.

In the past the German government helped AMD when they were in financial trouble. Now EU does it again. How much of Intel's money will now go to AMD though more or less visible EU channels, just because AMD has plants and employs EU citizens, in the EU?

I live in an EU country, and I am pro-EU, but this doesn't seem right to me. I'm not saying that Intel's business practices are clean. Intel is not a fluffy cuddly bunny. Every other company in the world will follow it's own interests (AMD included, since it's sister company ATi has exclusivity contracts... as does nVidia - don't shoot me).

So making an example out of #1 just because they actually have the funds to pay the ridiculously high fine is not the way to go. They should fine everyone else too. This happens everywhere, even in hospitals. The bullshitness of it all makes me laugh.

I am not sure about the numbers, but AMD/ATi were under with almost 700 mil. and Intel was somewhat profitable in Q1 2009. I think this fine actually forces Intel to post a loss in the next quarter, bringing them down to AMD's level, a company that has less and less competitive products. So in a crisis situation, turn a company's profit into a loss. Way to go EU! Helping out the global economy... then again, Intel is an US company... oups.
Posted on Reply
#9
WarEagleAU
Bird of Prey
That is funny snakeoil.

On topic, thats alot of cash to be fined. I agree with the findings though, it is shady. If AMD had done that, Intel would have started whining back in the day as well. Im not totally blaming 100% on Intel, AMD has a smudgeon of a part (like 1%) for not getting its name out there. They arent newbies in the chip making world, they should advertise like Intel did. Who remembers Blue Man Group throwing themselves at the wall, sliding down and making a pentium 3 symbol? That was just smart there :rofl:
Posted on Reply
#10
Mussels
Moderprator
Sihastru said:
So, every exclusivity contract that is in effect now or will be in the future is in fact an illegal contract. Every rebate that someone gets because they made a choice to remain exclusive is illegal.

So Sapphire, exclusively manufacturers ATi cards is in fact on the wrong side of the law. Don't tell me that they are exclusive just because they are in love with ATi. They get certain benefits.

Every exclusivity contract entails (visible or hidden) benefits. Wake up and smell the bullshit. It's common business practice.

In the past the German government helped AMD when they were in financial trouble. Now EU does it again. How much of Intel's money will now go to AMD though more or less visible EU channels, just because AMD has plants and employs EU citizens, in the EU?

I live in an EU country, and I am pro-EU, but this doesn't seem right to me. I'm not saying that Intel's business practices are clean. Intel is not a fluffy cuddly bunny. Every other company in the world will follow it's own interests (AMD included, since it's sister company ATi has exclusivity contracts... as does nVidia - don't shoot me).

So making an example out of #1 just because they actually have the funds to pay the ridiculously high fine is not the way to go. They should fine everyone else too. This happens everywhere, even in hospitals. The bullshitness of it all makes me laugh.

I am not sure about the numbers, but AMD/ATi were under with almost 700 mil. and Intel was somewhat profitable in Q1 2009. I think this fine actually forces Intel to post a loss in the next quarter, bringing them down to AMD's level, a company that has less and less competitive products. So in a crisis situation, turn a company's profit into a loss. Way to go EU! Helping out the global economy... then again, Intel is an US company... oups.
you're getting it wrong.

businesses themselves are free to choose if they want to be exclusive, or branch out.
The corporations they buy equipment from are not allowed to dictate the terms, however.

Intel has taken the choice away from smaller businesses, its as simple as that. "sell only our stuff, or risk going out of business"
Posted on Reply
#11
WarEagleAU
Bird of Prey
Well said Mussels, I didnt see his post until I posted mine. I am not going into a diatribe here on the whole things, suffice to say, Intel dictated.
Posted on Reply
#12
laszlo
alexp999 said:


I agree they have done some anti-competitive/anti-trust practices, but IMO, rebates to manufacturer's shouldnt have been one of them.
you're confusing a normal rebate (when you buy for ex.5000 CPU at 100 USD/pcs instead of 120) with a conditioned rebate(you buy the 5000 CPU with only 90 if you don't sell AMD)
Posted on Reply
#13
Sihastru
Mussels said:
you're getting it wrong.

businesses themselves are free to choose if they want to be exclusive, or branch out.
The corporations they buy equipment from are not allowed to dictate the terms, however.

Intel has taken the choice away from smaller businesses, its as simple as that. "sell only our stuff, or risk going out of business"
I am not sure that you're aware, but for example, ATi didn't allow manufacturers like Sapphire to offer overclocked versions of certain cards. Just recently ATi has allowed the manufacturers to offer non-reference overclocked cards. So ATi dictated there. Just an example. And ATi still dictates the terms of exclusivity contracts.

If you think there is no "behind the curtains" action in there, think again. In every contract there are two sides. Each side has benefits and obligations. They are negotiated in the draft version of the contract. Each side dictates here more or less.

How do they risk going out of business if the competing products were so good? They must have been very good if Intel had to sweeten the deal for it's own low quality, low performing products. The only way they would go out of business is if there were no competing products to be found...

Think what you want of it. To me it looks like a :nutkick: that EU gives to Intel... "hey buddy, slow it down, we feel very protective of AMD, and we would like them to catch up to you... OR ELSE!".

Just to spice things up:

If I were Intel, I would organize a press conference today and announce that we won't be selling our products in any EU member state anymore. If anyone wants an Intel product they would have to imported on the black market. I can think of a few billion people that would do that. Because they want Intel products more then they want chocolate.

That is very difficult to believe since a world without Intel is a completely different world from ours. It is impossible to imagine the world without Intel. Go ahead, try it... but think about the fact that Intel is not just about CPUs and chipsets.
Posted on Reply
#14
Mussels
Moderprator
ATI can do what they like with allowing OC'd cards and the like. What they arent doing is saying "if you sell Nv as well, we'll hike the price"

Intel had a recognised brand name. AMD did not. average joe walked into a store in those days and saw 90% of the machines were intel... so he'd go intel.
Posted on Reply
#15
tigger
I'm the only one
Is it not partly the fault of the manufacturers accepting the "bribes" to only use intel products? I wonder how many companies actually accepted these,i bet its a lot more than we realize.
Posted on Reply
#16
Mussels
Moderprator
tigger said:
Is it not partly the fault of the manufacturers accepting the "bribes" to only use intel products? I wonder how many companies actually accepted these,i bet its a lot more than we realize.
less bribes, more blackmail. Imagine what would have happened if dells costs for CPU's went up 10% - their entire line would have become even less competitive.
Posted on Reply
#17
Sihastru
tigger said:
Is it not partly the fault of the manufacturers accepting the "bribes" to only use intel products? I wonder how many companies actually accepted these,i bet its a lot more than we realize.
There were a lot of them, if it warranted such a big fine. And the reason for this was because for this business sector, it is considered to be a normal thing. This is why I consider this fine to be more or less an EU which-hunt. Everyone does it, everyone is a which here.

So if everyone does it, why is it that only one takes the blame? Funny how things work out...
Posted on Reply
#18
Mussels
Moderprator
Sihastru said:
There were a lot of them, if it warranted such a big fine. And the reason for this was because for this business sector, it is considered to be a normal thing. This is why I consider this fine to be more or less an EU which-hunt. Everyone does it, everyone is a which here.

So if everyone does it, why is it that only one takes the blame? Funny how things work out...
you fine the big fish first, to scare the smaller ones into obeying the law.
Posted on Reply
#19
air_ii
alexp999 said:
If you ask me, giving rebates to use Intel chips, is very competitive. Its what drives prices down, competition, companies undercutting each other.

Are the EU going to fine car manufacturer's for you buying a car because they were offering you a discount making it cheaper than buying a similar car from another dealer? Wtf is the difference.
The difference is that Intel paid a dealer for their not selling AMD's stuff. It's not that they said - "Ok, you get 10% off everything because we like you". They said "Ok, you get 10% off as long as you don't sell AMD's crap".
Posted on Reply
#20
Sihastru
Mussels said:
you fine the big fish first, to scare the smaller ones into obeying the law.
This sounds like discrimination. A crime is a crime. Every crime must be punished.

If one day on a highway 100 guys driving 100 Tuned Civics will break the sound barrier and another guy with a Murcielago LP640 does the same thing at arguably the same time, you only stop and fine the guy in the Murcielago?

If at a protest there are 100 white blondes blue-eyed caucasians and a bold black guy and some violence acts are commited by the mob, then you only fine the black guy?

It is very non-EU-esque to discriminate.
Posted on Reply
#21
Sihastru
air_ii said:
The difference is that Intel paid a dealer for their not selling AMD's stuff. It's not that they said - "Ok, you get 10% off everything because we like you". They said "Ok, you get 10% off as long as you don't sell AMD's crap".
Do you know of any VW/Porsche exclusive dealers selling other cars then: VW, Porsche, Seat, Audi, Lamborghini? Have you ever seen a Fiat near a Lamborghini at an exclusive dealer?

EDIT: VW/Porsche/Seat/Audi/Lamborghini are part of the same GROUP. Dealers are exclusive to them because they get special treatment for this exclusiveness.
Posted on Reply
#22
Mussels
Moderprator
Sihastru said:
This sounds like discrimination. A crime is a crime. Every crime must be punished.

If one day on a highway 100 guys driving 100 Tuned Civics will break the sound barrier and another guy with a Murcielago LP640 does the same thing at arguably the same time, you only stop and fine the guy in the Murcielago?

If at a protest there are 100 white blondes blue-eyed caucasians and a bold black guy and some violence acts are commited by the mob, then you only fine the black guy?

It is very non-EU-esque to discriminate.
if you know 5,000 businesses have committed a crime, who do you go for first. the fish and chip shop down the road, or the multi billion dollar company with world wide market powers.

You go the big one, cause his illegal actions have greater ramifications on the marketplace.

At this point shiastru, I'm of the opinion you are just here to troll and make trouble.
Posted on Reply
#23
derFeef
Sihastru said:
Do you know of any VW/Porsche exclusive dealers selling other cars then: VW, Porsche, Seat, Audi, Lamborghini? Have you ever seen a Fiat near a Lamborghini at an exclusive dealer?
WTH are you talking about. You seem to misunderstand the whole thing.
Posted on Reply
#24
Mussels
Moderprator
Sihastru said:
Do you know of any VW/Porsche exclusive dealers selling other cars then: VW, Porsche, Seat, Audi, Lamborghini? Have you ever seen a Fiat near a Lamborghini at an exclusive dealer?
no. those businesses CHOSE to sell only high end cars of their choice.

If Lamborghini said "we'll give you 10% off, so long as you sell nothing but Lamborghini" or "we'll give you 5% off, so long as you keep audi to less than 5% of your stock" - that would be illegal.

you're coming up with example after example, of things that are completely wrong. please, just stop.
Posted on Reply
#25
Evo85
While I agree with the decision, the fine is absolutely stupid. And just contributes to the "sue happy" world we live in......
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