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Competition Commissioner Neelie Kroes says Intel case may be larger threat to E.U. business than Microsoft

According to a report on Forbes, the E.U. Competition Commissioner Neelie Kroes, was asked to formally charge Intel on grounds of illegal business tactics. Kroes was asked by a number of European Union investigators that have been on the Intel case since 2000. At that time, AMD filed complaints about Intel that claimed Intel monopolized its business in several European regions by causing grief to system builders.

The original AMD reports claimed that Intel disallowed certain vendors to have their usual discounts if purchases of AMD products exceeded 20-percent of the vendor's overall purchase. DailyTech previously reported that Intel was in headlines for even bribing vendors not to carry AMD products. The original report by Financial Times Deutschland also noted that Intel carried out similar actions within the U.S.

Kroes is in the process of deciding whether or not to go through with a full charge on Intel. If not, the six year old case against Intel will be dropped. Until then, however, Kroes is requesting more information about Intel's activities in Europe. Kroes is proceeding cautiously, citing that the case with Intel could even be more complex than the Union's 10 year old antitrust case with Microsoft.

Early last year, Korean Fair Trade Commission raided the offices of Intel Korea. The KFTC deemed that Intel practiced unethical and illegal business practices that also involved a number of vendors. Intel representative Chuck Mulloy told reporters that Intel will fully cooperate with the investigation. "We believe the investigation is continuing. We will continue to cooperate," said Mulloy.


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not surprised
By Schrag4 on 1/17/2007 9:46:10 AM , Rating: 2
I've always felt that the business practice of vendors not selling to or providing discounts to a company if it does business with its competitor to be, 'questionable' at best. Of course Intel is not the only one that does this. The soft drink companies do it as well.

To me, this practice simply prevents the free market from doing what it does well. To avoid a flame war from AMD and Intel die-hards, let's look at soft drinks situation. If everyone and their dog preferred Pepsi, then no matter what what discount Coke offered, all the restaurants would go with Pepsi. If it was 60/40, however, with a big enough discount, Coke could persuade restaurants and other businesses to go with them. (I prefer Coke, personally)

If the practice was never done, businesses that sell soft drinks would simply look at what sells and buy the proportion from each vendor that's appropriate to meet the customers' needs. What a novel concept...

Besides, providing a 'discount' to you if you don't buy from my competition sure sounds like a bribe to me. Just my 2 cents though.




RE: not surprised
By Pythias on 1/17/07, Rating: -1
RE: not surprised
By masher2 (blog) on 1/17/2007 10:19:41 AM , Rating: 2
> "No businessman with a brain would consider their customer's interest ahead of their own.."

Rather more correct to say no business would consider their competitor's interests ahead of their own. That's why capitalism works so well...because the best way to make a buck is to give the customer what he wants, and do it better, faster, and cheaper than anyone else.


RE: not surprised
By Pythias on 1/17/07, Rating: -1
RE: not surprised
By masher2 (blog) on 1/17/2007 10:27:28 AM , Rating: 2
You articulated very well...I didn't mean to suggest otherwise.


RE: not surprised
By Schrag4 on 1/17/2007 10:29:35 AM , Rating: 4
I'm not talking about proving a bulk discount. Volume discounts are fine, buy why do you care if I'm buying from your competition? What I'm talking about is having your customers sign something saying they won't buy anything from your competitor in order to get a discount, regardless of what kind of volume they're buying from you. Again, that sounds like a bribe to me.

And who said anything about putting the customers' interests ahead of your own? Yes, you are trying to make money, that's why you're in business. But if you can't provide something that the customer values, you won't be in business for long.


RE: not surprised
By Pythias on 1/17/2007 10:41:20 AM , Rating: 2
These kinds of contracts are signed all the time, especially in the service industry, real-estate management for instance.

What about labor contracts? "I promise to work for you at the rate discussed for x amount of time, provided that you don't can me and hire someone else at a lower price"

Is that blackmail? Or a bribe?


RE: not surprised
By dagamer34 on 1/17/2007 10:30:18 AM , Rating: 2
There's a difference between having discounts and such, however, it becomes quite sahdy and should be illegal if you are now haggling based on how much an owner buys of a competitor's product. That's nothing short of blackmail right there, but at least a bait and switch in terms of prices. Because eventually you are locked out of buying your competitor's product and said company slowly increases prices. This is pretty much what Intel is doing and it's going to get them into some serious trouble.


RE: not surprised
By masher2 (blog) on 1/17/07, Rating: -1
RE: not surprised
By RobFDB on 1/17/2007 11:09:57 AM , Rating: 3
Correct me if I'm wrong but, are you trying to say that if Intel was really locking AMD out of the processor market, there are:

quote:
a dozen more are ready to step in to fill the void.

Do you honestly believe that? It might hold true in a market that has low barriers to entry, but in this market the barriers to entry are massive. Huge research costs, plus the cost of either building fabs or getting another company to make your chips, and that's just for starters.

The thing is AMD hasn't alledged that Intel has locked them out of the market, just that it's used it's market position to keep AMD's share of the market at a certain level. Big difference.


RE: not surprised
By masher2 (blog) on 1/17/07, Rating: -1
RE: not surprised
By Axbattler on 1/17/2007 11:48:03 AM , Rating: 2
Depends what you consider 'trouble'. I had trouble finding an AMD laptop in Taiwan a few years back. For desktops, it was a little better, with the reality is in between, but push come to shove, it was closer to 10x Intel only than 10x non Intel exclusive.

It's a little less one sided today, [i]perhaps[/i] with the Athlon's recognised success. But I am weary of the 'anyone on the planet' comment. How many countries have you checked?


RE: not surprised
By masher2 (blog) on 1/17/07, Rating: -1
RE: not surprised
By Motley on 1/17/2007 12:34:26 PM , Rating: 2
If you are trying to state something you believe is true, it's best not to exaggerate to the point that your statements are obviously false.

"anyone on the planet"? Obviously false. I can show you people who couldn't find their own nose, let alone an AMD processor.


RE: not surprised
By masher2 (blog) on 1/17/07, Rating: 0
RE: not surprised
By Motley on 1/17/2007 12:39:36 PM , Rating: 2
quote:
no consumer anywhere in the world has ever


I'd be willing to bet a bajillion dollars that's wrong.


RE: not surprised
By denka on 1/17/2007 1:21:34 PM , Rating: 3
quote:
early 2000..before AMD even HAD a mobile processor solution


I've seen a number of notebooks with K6-III. While this could have been not a specifically mobile solution (it could have been, I just don't bother to research), it worked quite well.


RE: not surprised
By Axbattler on 1/18/2007 2:45:33 AM , Rating: 3
The statement I am disputing is [...] "no consumer anywhere in the world has ever have difficulty finding an AMD processor for sale". You took it to a wider context there.

I'll discuss the topic in other threads - I do have more to say on this topic than pointing out a grossly exagerated statement.

But before that.

quote:
However, I know plenty of vendors that ship worldwide.

Having to purchase from outside the country is not what I classify 'without difficulty'. I've searched in large computer fair and major computer component 'markets' (online shopping for was not prevalent in Taiwan back then - I am not sure if that has changed).