Wednesday, May 13th 2009

Statement by Intel President and CEO Paul Otellini on EC Ruling

Paul Otellini, Intel Corporation president and CEO today issued the following statement regarding the European Commission decision on Intel's business practices:

"Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal."

"We do not believe our practices violated European law. The natural result of a competitive market with only two major suppliers is that when one company wins sales, the other does not. The Directorate General for Competition of the Commission ignored or refused to obtain significant evidence that contradicts the assertions in this decision. We believe this evidence shows that when companies perform well the market rewards them, when they don't perform the market acts accordingly."

"Intel never sells products below cost. We have however, consistently invested in innovation, in manufacturing and in developing leadership technology. The result is that we can discount our products to compete in a highly competitive marketplace, passing along to consumers everywhere the efficiencies of being the world's leading volume manufacturer of microprocessors."

"Despite our strongly held views, as we go through the appeals process we plan to work with the Commission to ensure we're in compliance with their decision. Finally, there should be no doubt whatsoever that Intel will continue to invest in the products and technologies that provide Europe and the rest of the world the industry's best performing processors at lower prices."

Intel's Position on the AMD Antitrust Case
Since the 1990s Intel's principal competitor has been on a concerted campaign to get regulators and courts around the world to prevent Intel from competing aggressively in the market. The aggressive marketing campaign by Advanced Micro Devices (AMD) has included numerous complaints to regulators in multiple jurisdictions which all stem from the same set of allegations and source. It has included a private lawsuit in the U.S. and two in Japan. By all accounts the U.S. lawsuit could become one of largest antitrust cases in the history of U.S. Courts.

AMD's objectives are clear; it is seeking price protection and wants to become more successful by deterring Intel from aggressive competition. Stripped of hyperbole AMD's complaints around the world accuse Intel of competing too aggressively by offering customers attractive prices and marketing, and technical support to win their business.

The microprocessor market is fiercely competitive. That competition has resulted in tremendous benefits to consumers worldwide by providing continuous improvement in technology innovation, performance and capability at consistently lower prices. Intel believes in competition and has never shied away from it. As you will see from information contained on this site Intel believes it operates well within the law.

More information about Intel and "Competition in the Innovation Economy" is available here.Source: Intel
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128 Comments on Statement by Intel President and CEO Paul Otellini on EC Ruling

#1
iStink
Steevo said:
What happens if AMD goes out, and Intel is no longer forced to innovate and can start jumping pricing. AMD got it's foothold as Intel was raping the consumer.


I don't agree with the fine, and what will happen to it, but I honestly do believe that Intel needs a slap on the wrist for what they have done.

http://www.cpu-world.com/CPUs/80486/


A look back at the original market and you can understand AMD's position, they are the only real VIAble competitor to Intel currently. Lets say that you have a Lemonade business, and your neighbor has one also, and you are doing well, you come up with a new formula to sell, that tastes better than your old formula, and your competitors formula. You go to grocery stores and distributors to see if you can get them to sell your lemonade. However your neighbor has bribed the grocers, and distributors, and warehouses to not sell your lemonade. You can't force them to sell yours, even though it is a better product and will allow you to become more profitable and force more competition in the market, thus costing customers less in the long run.


So what do you do?

If in a few years AMD goes under and a Intel chip costs twice what it does now, and ATI being tied to AMD fails also and Nvidia starts REALLY raping the consumers, just remember.


You allowed and supported it.

So far as the car market, imagine their only being two players. Ford and Toyota, but Ford has just bribed your city to NOT allow a new Toyota dealership to be built. Now you have one choice, and they can ask what they want, make what they want, and you have no other options.
First of all, AMD hasn't made a better tasting lemonade than Intel (lol) but they HAVE improved, and they ARE a viable competitor. If Intel has given the grocery store incentives not to sell AMD's lemonade, then AMD needs to bring their own incentives to the table. It's marketing.

By your logic, buy one get one free is a bribe to the customer, and any company that can't offer a similar sale should be compensated for these horrendous sales tactics.

Oh and the ford and toyota analogy has holes in it because Intel never bribed a city, forcing residents within that city a single choice. Intel was focusing on businesses, and the businesses (only consumer with choice in this situation) made the decision based on common sense.
Posted on Reply
#2
tigger
I'm the only one
If amd did go down,i dont really think people will pay double prices,i think they'll just say feck it,i'll stick with what i've got now.

As far as i'm concerned its just one company crying coz the other company is doing better.I dont think theres such a thing as fair practices in buisness,You do whatever it takes to get people to buy your stuff.Screw the competitors.
Posted on Reply
#3
Imsochobo
I wonder why i didnt see amd chips from 2000-2006, when amd pwned intel, over and over. same with ATI.( i see thousands now) all is okey now, except ati needs more share in laptops, which happening.... oh right now :P (been on sideline a long time now tho)
Now, stupid talesmen.
They hurt the rival, rival get less R&d money, less fabs, higher production cost, less compotition, higher prices, less performance evolution.
Posted on Reply
#4
pmrdij
this is deserving:



what cracks me up the most about all the "this is BS" people ranting off about this ruling and intel's position is the obvious. intel has been engaged in evil doing (anti-competitive practices) since the late 90's through to this day. it's pretty obvious that both the intel fan camp and intel themselves do not remember the past decade. anyone remember when the K6-III's came out? intel began to lose its hold on the performance crown back then. Google up the reviews. once the Slot A and eventual Socket A Athlon's surfaced intel had a problem keeping pace for years to come in the same price bracket with AMD's offerings. again Google up the reviews.

what has always been the absolute nail in the argument for me is that when the Slot A Athlon's came out sites like Tom's Hardware, [H]ard|OCP and others would stumble upon links to ASUS, MSI and other mobo manufacturers website product descriptions for their Slot A motherboards and in nearly every case for just about a years time the page(s) would vanish once the public domain discovered them. they were never accessible through the manufacturers sites themselves. i remember that only a small few (FIC, Tyan and i think EPOX) whom actually had their products existence in plain view through the web and were linked to from within their own websites while the others did everything to hide the very existence of their offerings yet you could definitely go into Fry's or elsewhere and find their products on the shelves for Slot A.

why would a motherboard maker fear anyone finding technical details on their product? doesn't take a genius to see how a threat of a "chipset shortage" from intel could possibly be a deterrent to those that catered to the other side of the fence...

iStink said:
Back when 939 dominated P4, did Intel complain? Nope. They stepped up.
sure they didn't complain but you also didn't notice any of those they gave the reach arounds to jumping to use the CPU's that beat down on the P4...

- Robert (pMr)dEATHiNjUNE
Posted on Reply
#5
Imsochobo
iStink said:
same thing did hitler? Jeez man, ever heard of Godwin's law?

We're not talking about the desecration and extermination of an entire group of people here dude so try not to elevate intel's business practice to such horrendous extremes.

Back when 939 dominated P4, did Intel complain? Nope. They stepped up.

It's a shame that the world is turning out the way it is. If you're a large enough business, and you do bad, you can point blame at the competition for doing too well and you'll be compensated.
I didnt see a single A64 in a physical retailer.
All the nerds sat with A64 while companies, retailers, schools, anything thats made of companies like HP, dell, acer, ibm/lenovo used intel, there was one company that did use AMD, but that was 100% norwegian.
* edit*
When Athlon XP came, there was some HP models with GF2 series with AMD cpu, but in rare occasions we would ever see amd.
Posted on Reply
#6
Ahhzz
I call BS on Intel's Press release.
Posted on Reply
#7
mdm-adph
(Whoa -- did that guy just say what I think he said?)

iStink said:
Back when 939 dominated P4, did Intel complain? Nope. They stepped up.

It's a shame that the world is turning out the way it is. If you're a large enough business, and you do bad, you can point blame at the competition for doing too well and you'll be compensated.
Buddy, that's precisely when Intel started breaking the law. Their P4 chips sucked, and a lot of businesses were starting to probably make inquires with AMD because their chips were better.

So, instead of making better chips, Intel started threatening vendors and "encouraging" them to use their own crappy chips instead of going to AMD, by threatening not to sell any chips to them (if they start buying from AMD as well).

I swear, if I have to explain this one more time to people I'm going to go nuts. :confused:

Intel is not some "Champion of the FREE MARKET!!!111one" -- they are precisely the kind of company that's helping to destroy it.
Posted on Reply
#8
mtosev
W1zzard said:
why was it wrong what intel did? they used their power to do the best for their company, knowing that there would most probably be an investigation and a ruling. yet they did it, and you can bet, they did it because they ran the numbers and realized that even with a big fine it would be worth it.
i agree. i think Intel is not stupid at all. they know how to make money.


-----

in other news. when DELL wanted to order AMD cpus AMD couldnt manufacture the number of cpu that DELL wanted. So its AMDs problem if they cant make enought CPUs for their customers. if i dont get what i want in a store i go to another store.
Posted on Reply
#9
mdm-adph
mtosev said:
in other news. when DELL wanted to order AMD cpus AMD couldnt the number of cpu that DELL wanted. So its AMDs problem if they cant make enought CPUs for their customers. if i dont get want in a store i go to another store.
You're exactly right.

Unfortunately, regardless of what some here have said, Dell were more than willing to buy some chips from AMD and some from Intel, and were more than willing to undertake the necessary costs required to handle two types of chips. (Since, to the end user, nothing would be different between one computer running an AMD chip and one running an Intel.) This was because of lots of reasons -- at the time, AMD chips were far better, using less power and operating generally faster.

Intel just couldn't be happy with this, though, and had to resort to bending the law to get their way.
Posted on Reply
#10
iStink
mdm-adph said:
(Whoa -- did that guy just say what I think he said?)



Buddy, that's precisely when Intel started breaking the law. Their P4 chips sucked, and a lot of businesses were starting to probably make inquires with AMD because their chips were better.

So, instead of making better chips, Intel started threatening vendors and "encouraging" them to use their own crappy chips instead of going to AMD, by threatening not to sell any chips to them (if they start buying from AMD as well).

I swear, if I have to explain this one more time to people I'm going to go nuts. :confused:

Intel is not some "Champion of the FREE MARKET!!!111one" -- they are precisely the kind of company that's helping to destroy it.
Buddy, offering your product at a lower price with guaranteed dominance in the assembly line of your customer isn't illegal. "Build all your computers with our processors, and we'll give you an extra 10% off" isn't illegal. They offered a discount to stay competitive. Did it ever occur to you guys these companies they "bribed" didn't need to take that discount? There were plenty that didn't, like HP and Gateway / EMachines.

I find it amusing when a company like AMD steps up and offers competition, that everyone acts so shocked and surprised that the once dominant Intel doesn't stay exactly the same.

No, but you guys are right. From a business perspective, it makes so much more sense to not be competitive, and remain the most illogical and impractical choice for all vendors. What was Intel thinking?

Bottom line, Intel did what they had to do in order to sell more of their product. When Pizza Hut carries all pepsi products, it's the same exact thing. I understand the animosity towards any giant company who appears to dominate a market, but if the situation were reversed everyone would be cheering AMD on for being the underdog that brought the heat.
Posted on Reply
#11
FreedomEclipse
~Technological Technocrat~
Here in the UK there have been many OEM companies (now defunct) in the past that have sold mainly AMD systems. Some Europeans may remember OEMS, like Time Computers owned by Granville Technology Group & Tiny Computers who were eventually bought out by Time Computers.

They sold a wide range of systems & they were there since AMD Athlons first hit the market & carried on selling AMD based machines till the day they went into Administration in July 2005.

sometimes, its the small companies that actually make a difference.
Posted on Reply
#12
Bl4ck
almost every one here says that the fine is bs, it's not , the fine is about Intel giving companies money/bribes and that way they destroyed the "free" market in EU , they used the same practices in Japan where they where also fined with big fines. Use your brains ppl , EU didn't fine the Intel (almost a monopolist now with their x86 license threats ) for beeing a better chip manufacturer , they fined them because they bribed the "customers" and there for engaged in illegal activities. ;)
Posted on Reply
#13
iStink
Bl4ck said:
almost every one here says that the fine is bs, it's not , the fine is about Intel giving companies money/bribes and that way they destroyed the "free" market in EU , they used the same practices in Japan where they where also fined with big fines. Use your brains ppl , EU didn't fine the Intel (almost a monopolist now with their x86 license threats ) for beeing a better chip manufacturer , they fined them because they bribed the "customers" and there for engaged in illegal activities. ;)
The thing that irritates me about this is, from a business perspective, it doesn't appear they did anything wrong. If anything, AMD should have countered with their own incentives, and since they didn't, their fair punishment was a loss in market share. Pepsi gives incentives to places like Pizza Hut to offer only pepsi products. Motor parts companies like motorcraft offer companies like Ford incentives to only offer motorcraft parts. Heck, even broadcast companies offer incentives for letting sporting events only be viewed on their network. Why is it such a big deal that Intel OFFERED an incentive to only carry their product?
Posted on Reply
#14
Bl4ck
iStink said:
The thing that irritates me about this is, from a business perspective, it doesn't appear they did anything wrong. If anything, AMD should have countered with their own incentives, and since they didn't, their fair punishment was a loss in market share. Pepsi gives incentives to places like Pizza Hut to offer only pepsi products. Motor parts companies like motorcraft offer companies like Ford incentives to only offer motorcraft parts. Heck, even broadcast companies offer incentives for letting sporting events only be viewed on their network. Why is it such a big deal that Intel OFFERED an incentive to only carry their product?
that depends what you call an "incentive" , lower prices yes, but direct bribes combined with not letting the competition into the play on the market isn't fair . Lower prices for "only" customers is a Grey Line in the market, but Intel was using brute force tactics. all open "free market" is big BS if you ask me, the money drives big companies mad. :shadedshu
Posted on Reply
#15
mdm-adph
iStink said:
Buddy, offering your product at a lower price with guaranteed dominance in the assembly line of your customer isn't illegal. "Build all your computers with our processors, and we'll give you an extra 10% off" isn't illegal.
Unless you live on a desert island with no government, what the government says is illegal is illegal. As the EU has said this is illegal, it's illegal (in the EU). :shadedshu

But that's not even the issue -- the problem is that it's anticompetitive.

What Intel should've done is taken their licks, lost a little bit of business, and then got that business back when they made the Core2 (which is better than anything AMD had at the time). That's called capitalism.

See how it works? Intel was/is just being greedy.
Posted on Reply
#16
Bl4ck
mdm-adph said:

See how it works? Intel was/is just being greedy.
Amen, you made my point. I rest my case.:toast:
Posted on Reply
#17
mdm-adph
Bl4ck said:
Amen, you made my point. I rest my case.:toast:
Always glad to help.

What pisses me off the most about this whole business is that Intel didn't even need to do it. They were more than capable enough to design a better chip (like the wonderful Core2) and get any lost business back eventually. :shadedshu

They're the bigger, faster, stronger company -- they could've won the race in the end fair and square.

However, instead of using their size to compete, they just tried to push the other guy down, like an overweight bully.

And, unfortunately for them, I guess the teachers were watching. :laugh:
Posted on Reply
#18
Bl4ck
mdm-adph said:
Always glad to help.

What pisses me off the most about this whole business is that Intel didn't even need to do it. They were more than capable enough to design a better chip (like the wonderful Core2) and get any lost business back eventually. :shadedshu
well that sad truth is that after 2000 Intel is beeing run by PR Guys and not the engineers, PR guys say we want a 100$,200$ and a 4000$ Cpu , the tech guys just jump :wtf:
Posted on Reply
#19
iStink
Bl4ck said:
that depends what you call an "incentive" , lower prices yes, but direct bribes combined with not letting the competition into the play on the market isn't fair . Lower prices for "only" customers is a Grey Line in the market, but Intel was using brute force tactics. all open "free market" is big BS if you ask me, the money drives big companies mad. :shadedshu
Perhaps I'm over simplifying things. Did they send them on trips to Hawaii? Did they make sure certain kids got into good schools? What? I'm thinking of it purely on a discount by volume type of deal. Why is it ok for Pepsi to make sure Pizza Hut only sells their products, and not Cokes? See what I'm saying?

mdm-adph said:
Unless you live on a desert island with no government, what the government says is illegal is illegal. As the EU has said this is illegal, it's illegal (in the EU). :shadedshu

But that's not even the issue -- the problem is that it's anticompetitive.

What Intel should've done is taken their licks, lost a little bit of business, and then got that business back when they made the Core2 (which is better than anything AMD had at the time). That's called capitalism.

See how it works? Intel was/is just being greedy.
I'm looking at this from the perspective of business and marketing. If I've been a dominant company in a market for a number of years, and another company steps up, what's wrong with offering better prices to keep your customers? Intel never said, buy it or lose it. They said buy it, fine, but buy only it, and we'll hook u up on better pricing. They set up a practical offer that AMD should have countered. But youre right, it's EU law, and the law's the law.
Posted on Reply
#20
TheMailMan78
Big Member
I just started my own line of CPU's. Heres the wafer.

I hope the EU doesn't come after me.
Posted on Reply
#21
Easy Rhino
Linux Advocate
way to go intel! tell those EU fascists where they can stick that fine! amd is a pure failure. intel has nothing to do with it.
Posted on Reply
#22
mdm-adph
iStink said:
Intel never said, buy it or lose it.
Actually, according to the reports I've seen from the case in Europe and the ones in Japan, that's exactly what Intel is reported to have said. :shadedshu

"If you buy from AMD we'll raise the prices on our chips for you, and since AMD can't meet your total demand, you'll be forced to buy our higher price."

And therein lies the problem. That's "abusing your position within the market."

TheMailMan78 said:
I just started my own line of CPU's. Heres the wafer.
http://goodiesfirst.typepad.com/photos/uncategorized/2007/11/13/waffle.gif
I hope the EU doesn't come after me.
How convenient for me -- I can cook your 25-core pastry processor on top of my old Pentium D. :D
Posted on Reply
#23
Easy Rhino
Linux Advocate
a lot of people here misunderstand the basic premise of open competition. if you manufacture a product you have a right to sell that product for whatever price you want to whomever you want. the buyer has no right to demand you lower your selling price or sell a certain quantity of your product to them. the buyer has no right because it is not the buyers property, it is the manufacturers property. this is where bargaining comes in. if nobody buys intel products because of their high prices or because intel pulls their products from clients who also sell the competition, then intel goes under.
Posted on Reply
#24
iStink
mdm-adph said:
Actually, according to the reports I've seen from the case in Europe and the ones in Japan, that's exactly what Intel is reported to have said. :shadedshu

"If you buy from AMD we'll raise the prices on our chips for you, and since AMD can't meet your total demand, you'll be forced to buy our higher price."

And therein lies the problem. That's "abusing your position within the market."
Well that is rotten. Please excuse my ignorance on the subject. I didn't realize they said all that. I thought the most controversial issue here was the fact that they were offering a discount for dominance in the assembly line, not an increase in price for the opposite.
Posted on Reply
#25
mdm-adph
Easy Rhino said:
a lot of people here misunderstand the basic premise of open competition. if you manufacture a product you have a right to sell that product for whatever price you want to whomever you want. the buyer has no right to demand you lower your selling price or sell a certain quantity of your product to them. the buyer has no right because it is not the buyers property, it is the manufacturers property. this is where bargaining comes in. if nobody buys intel products because of their high prices or because intel pulls their products from clients who also sell the competition, then intel goes under.
Good points.

However, you left something out -- conversely, once your company has reached a certain percentage of market share, you no longer have a right to demand that your buyer buy from only you.

iStink said:
Well that is rotten. Please excuse my ignorance on the subject. I didn't realize they said all that. I thought the most controversial issue here was the fact that they were offering a discount for dominance in the assembly line, not an increase in price for the opposite.
If all they were doing was offering discounts, even I'd have no problem with it. Selling things at a loss is a time-honored tradition of the free market. :laugh:
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