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
allen337
Intel should sue every company they gave a discount to and get their money back to pay the fine, that would make EU's BS go away. If it was breaking the law the buyers of the intel products knew also. Sue em Intel.
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#2
Sihastru
I thought we were having a discussion on an open forum. You say something, I reply. I say something, you reply. I don't think I am out of line just because I am trying to defend my point. Calling me a troll (publicly, of all the possible ways) doesn't make me wrong. It just gives me more power.

If you don't want news to be open to discussion, close the threads. I think a news this important deserves an open discussion, with somewhat deeper remarks then just the traditional "serves them right!".

I will just say one last thing, then I will not post on this thread anymore. I have other posts in other threads, people actually considered me helpful. I don't have that many posts, you can check them.

About what I want to say, on the topic. An exclusivity contract is an exclusivity contract. You get rebates because you are exclusive (by definition). If you don't want to be exclusive, no problem, but you don't get the rebate, you pay the full price. There is no mention that the ones that wouldn't be exclusive would pay anything on top of the full price.

Anyway, smarter people then me (us) made the decision. And their decision is final (pending appeal). So that is it. Over and out.
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#3
derFeef
Sihastru said:
About what I want to say, on the topic. An exclusivity contract is an exclusivity contract. You get rebates because you are exclusive (by definition). If you don't want to be exclusive, no problem, but you don't get the rebate, you pay the full price. There is no mention that the ones that wouldn't be exclusive would pay anything on top of the full price.
But the contract was something like this:
Don not sell AMD products and you will get rebates with our products. Thats not a legal contract and this is what everything is about.
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#4
Darknova
Anti-competition laws are there to stop one company becoming the dominant power in the market and forcing all the other businesses out of the market.

I'm sure I don't need to explain how bad it would be for the consumers if Intel was the only company in the x86 market? Stagnant market, no innovation, a company that can set WHATEVER price it wants. That is very bad for us.

Whatever you think of the A-C laws, what Intel did was against the law, they set out to force AMD out of business by forcing the OEMs, and smaller business to buy their products via various means. That is illegal, therefore they should be punished.
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#5
Scrizz
w8, so once a small company becomes successful and grows then they get fined for being top dog?
Posted on Reply
#6
Valdez
Scrizz said:
w8, so once a small company becomes successful and grows then they get fined for being top dog?
No, please read the topic, before you post something silly.
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#7
laszlo
Scrizz said:
w8, so once a small company becomes successful and grows then they get fined for being top dog?
top dog is not god to do whatever they want....
Posted on Reply
#8
gumpty
We're all paying for Intel's crimes ...

Suck it Intel. :D

All of you realise that we are paying for these crimes right now, don't you?

These anti-competitive practices were happening back in the days when AMD had processors that could actually compete with Intel's across the board. Because Intel limited and restricted the amount of AMD CPUs that were sold (and sold more of their own), AMD had less money to spend on R&D (and Intel had more). Consequently Intel comes out with Core 2 & i7 & AMD have fallen behind.

Imagine if AMD had had more $$ to research better CPUs? We might have been at a point now where AMD's Phenoms were competing with the i7. Therefore the i7 would probably be a damn sight cheaper. But they're not. We lose. We're stuck paying $1000+ for extreme series processors cause they have nothing to compete against. We lose.
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#9
HTC
derFeef said:
They gave rebate under the condidtion not to build/sell AMD powered PC´s. Now if that is fair competition, there must be something wrong with your mind :eek:
btarunr said:
You need some research on what are the actual charges leveled against Intel. Previous news. Intel bribed manufacturers to cancel/delay their products based on AMD CPUs, and dictating manufacturers on what share of their products should use Intel processors. It's illegal, and not just in my opinion, but that of not only EU, but also the governments of Japan, and Korea, with investigations backed by US Federal Trade Commission.
derFeef said:
Problem? They got a huge GAIN with this. Please, research a bit :)

edit - from the source:
In addition to providing rebates to manufacturers that bought almost entirely Intel products, the Commission found that the chipmaker had paid them to postpone or cancel the launch of specific products based on AMD chips.
Mussels said:
"dont sell AMD and get 30% off"
"sell less than 10% AMD and get 20% off"

etc.


Basically in the competitive PC world, it meant if you went with AMD... you lost out. you would never be able to price match your competitors. The general public knew "pentium" they dont know "athlon" - intel had made it so that if you sold AMD, your intel systems would cost too much and never sell, so it was intel or AMD - no middle ground.

And if you gotta pick one or the other, you go the one the public will buy... and that was intel.
This is why i agree that Intel should be fined.

btarunr said:
The commission can charge as much as 10% of Intel's annual revenue as fine, which was $38 billion in 2008.
Only $1.06 Billion? Intel must be laughing hard: they gave a very serious blow to AMD (worth far more then this fine over the years, IMHO) and only pay this amount when they made $33.8 billion in 2008?

If i were the Intel CEO, i ought to be thinking something like this: "Outstanding!! We've crippled the competition severely and only have this to pay!"


For Intel, doing this payed off :mad:
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#10
tigger
I'm the only one
They'll pay the fine out of the change tin on the ceo's desk.
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#11
btarunr
Editor & Senior Moderator
HTC said:
Only $1.06 Billion? Intel must be laughing hard: they gave a very serious blow to AMD (worth far more then this fine over the years, IMHO) and only pay this amount when they made $33.8 billion in 2008?

If i were the Intel CEO, i ought to be thinking something like this: "Outstanding!! We've crippled the competition severely and only have this to pay!"
Notice I said "up to". :)

W1zzard is right. In this conspiracy, Intel ended up gaining more than what the fine imposed attempts to put a stop to. In essence, all these years of proven malpractices were worth it, despite the fine. 1.06 B Euro really is peanuts at the macro-level. All these repercussions IMO are image cleanup, and sympathy harvest that automatically follow such judgements, in order to cushion the stock-price, and preventing a trench.
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#12
gumpty
HTC said:
This is why i agree that Intel should be fined.

Only $1.06 Billion? Intel must be laughing hard: they gave a very serious blow to AMD (worth far more then this fine over the years, IMHO) and only pay this amount when they made $33.8 billion in 2008?

If i were the Intel CEO, i ought to be thinking something like this: "Outstanding!! We've crippled the competition severely and only have this to pay!"


For Intel, doing this payed off :mad:
Agreed.

People here are getting riled up about how huge the fine is. €1,060,000,000 is a LOT of money to you, me, and Fred next door; but to Intel, who are worth €85,000,000,000+, it is nothing more than a kick in the nuts. It'll hurt for a bit, and the shareholders will be pissy come the AGM, but they'll get back up and keep riding the wave of the better products they could afford to research with the extra money that these crimes generated.
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#13
HTC
btarunr said:
Notice I said "up to". :)

W1zzard is right. In this conspiracy, Intel ended up gaining more that what the fine imposed attempts to put a stop to. In essence, all these years of proven malpractices were worth it, despite the fine. 1.06 B Euro really is peanuts at the macro-level. All these repercussions IMO are image cleanup, and sympathy harvest that automatically follows, in order to cushion the stock-price, and preventing a trench.
I know. Even if the fine was the whole $3.8 billion, it would still be "pocket change" for Intel.

IMHO, a $20 billion fine would be a start ...
Posted on Reply
#14
btarunr
Editor & Senior Moderator
HTC said:
$20 billion fine would be a start ...
$20 B would mean no more Intel in EU for a few years, reason being that Intel would not pay up and simply quit the market (and end up saving in the process). EU won't remain a viable market to sell in. No company in its right mind would pay that much. EU knows it can't overdo this. Market demand, AMD and other CPU makers exploiting conditions, and illegal imports would dent EU, which will then be forced to reconsider the fine. 1.06 B however, doesn't strike the threshold. Intel still has a lot to lose if it doesn't pay up that money.
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#15
HTC
btarunr said:
$20 B would mean no more Intel in EU for a few years, reason being that Intel would not pay up and simply quit the market (and end up saving in the process). EU won't remain a viable market to sell in. No company in its right mind would pay that much. EU knows it can't overdo this.
I see your point, and i have to agree: Intel would simply not sell to the EU, but they would still have to pay the fine.

There's a way to counter this, though: have EVERYBODY (countries) fine Intel. If so, Intel wouldn't stop selling everywhere, would they?


Still, how much do you think AMD lost?

If Intel hadn't done this, do you agree that AMD would have a better market share of the CPU market?

Let's imagine that AMD would have 15% more market share then it currently has: how much do you think that is worth? A TON more then the fine and don't forget to multiply that figure by the years this was going on ...
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#16
btarunr
Editor & Senior Moderator
HTC said:
I see your point, and i have to agree: Intel would simply not sell to the EU, but they would still have to pay the fine.

There's a way to counter this, though: have EVERYBODY (countries) fine Intel. If so, Intel wouldn't stop selling everywhere, would they?
EU lacks the capability to do that. Defaulting the fine would affect Intel's operations only in EU, nowhere else.
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#17
HTC
btarunr said:
EU lacks the capability to do that. Defaulting the fine would only affect Intel's operations in EU, nowhere else.
Yes, yes: i know. What i meant was to have all the other countries present Intel with a fine of their own.

Since the EU can't go after Intel the way they should, the combined fine (total from all the countries) should make a more realistic number: this way, Intel would be properly fined for it's dirty business practices.
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#18
FreedomEclipse
~Technological Technocrat~
alexp999 said:
Although I have written this doesn't mean I agree with it. :)

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.

I'm getting bored of the EU fining everything that moves :ohwell:
I have never heard of Intel giving consumers 'rebates' to use their products, same as most other hardware manufacturers. Seems schemes like this only exist outside Europe.
Posted on Reply
#19
lemonadesoda
This is just ASKING for Intel to innovate like this:

1./ Implement a CPU with "licensed" not purchased microcode
2./ Annual fee of $10 to use, just like a road-tax license imposed by governments. The fee could be "waived" at the discretion of Intel, unless
3./ They get dicked around, in which case, the fee becomes due for immediate payment, else
4./ CPUs stop working as soon as they phone home through the internet

Part 4 works if the CPU needs to dial home once in a while to validate the license, otherwise, they expire.
Posted on Reply
#20
Millenia
FreedomEclipse said:
I have never heard of Intel giving consumers 'rebates' to use their products, same as most other hardware manufacturers. Seems schemes like this only exist outside Europe.
No, they were offering rebates to business partners (mainly companies like HP, Fujitsu-Siemens etc) with very strict conditions, effectively nearly forcing OEMs to build Intel systems. This resulted in a situation where AMD would have had to sell their CPUs to business partners for a LOT less than they cost to manufacture, and with AMD being the smaller company here they couldn't afford to.
Posted on Reply
#21
btarunr
Editor & Senior Moderator
HTC said:
Yes, yes: i know. What i meant was to have all the other countries present Intel with a fine of their own.
If moving all countries to do the same thing was that easy, mankind would have colonized the moon, Mars, and Europa by now.
Posted on Reply
#22
Darknova
Scrizz said:
w8, so once a small company becomes successful and grows then they get fined for being top dog?
No, there's a difference between a company that becomes successful through it's own marketing and products, and a company that becomes successful by bribing others.
Posted on Reply
#23
laszlo
i forget...

is not only Intel fault;the companies who has bought with special rebates are guilty also; they have charged the final consumer with a high profit margin;they deserve also to be fined
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#24
15th Warlock
No matter how you cut it, one billion euros seems kinda harsh doesn't it?

I mean, it's not like Intel didn't break the law, and I'm all for breaking bad corporate practices, but with the economy being as bad as it is, do you really think its necessary to rule a fine so high? I know it wont put Intel out of bussiness neither, but in times like this when PC sales are down overall (even Atom shipments have decreased by 33% this quarter) do you have to necessarily beat them to the ground? (even tough Intel has enough cash to pay the fine...).

The point is they were found guilty by a jury and all, and they certainly have to pay for it and stop these practices immediately; but how do they determine consumers in general have been affectted to the tune of one billion euros by their practices?

Besides, is this money going to be used to benefit the consumers in the end? What will the EU do with all this money? Send relief checks to anyone who bought a PC in Europe in the last 10 years?

Just my two cents...
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#25
Sugarush
Considering that Intel's turnover last year was about 38 billion, and considering how they distorted they free market, 1 billion is nothing. They could have been ordered to pay up to 10% of their turnover.

And don't worry about Intel, they've got about 10 billion in cash, so this fine is peanuts for them.

To all the people whining about the socialist EU who is just subsidizing AMD's EU plants, read the news: Intel is likely to face similar charges in the US as well, oh and I forgot they've been already found guilty of unsound business practice elsewhere...
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