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Fine is the largest ever levied for antitrust violations in the EU

Intel is the largest CPU maker in the world and dominates the market in many categories. Allegations were made against Intel in Europe that the company was using its dominant market position to reduce competition and prevent AMD from gaining market share.

DailyTech
has been following the EU investigation into Intel closely. This week allegations against Intel were outlined that claimed the chipmaker offered computer makers discounts and incentives to not use AMD products and to cancel AMD products in development.

The New York Times reports that The European Commission has now ruled against Intel and fined the massive chipmaker $1.45 billion. The fine is the largest ever levied against a company by the Commission and eclipses the fine that Microsoft paid to the EU for anticompetitive practices by about two times.

The EU competition commissioner Neelie Kroes says that the massive fine was justified because Intel has denied consumers a choice for CPUs in products. Kroes told the NYT, "[Intel used] used illegal anticompetitive practices to exclude its only competitor and reduce consumers’ choice — and the whole story is about consumers."

Intel CEO Paul Otellini said the firm would appeal the decision. Otellini said, "We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace. There has been absolutely zero harm to consumers."

AMD's Giuliano Meroni, president of European operations said, "[The decision would] shift the power from an abusive monopolist to computer makers, retailers and above all PC consumers."

Kroes also says that Intel went to great lengths to cover up its anticompetitive actions. Part of the ruling against Intel also forces the company to immediately stop offering computer makers rebates that are part of the reason Intel maintains an 80% market share in Europe.

Intel must change these practices immediately pending appeal though it can ask for an injunction. The $1.45 billion fine has to be paid immediately, but will be placed into an account and held until all of Intel's appeals are exhausted. The appeals process could reportedly last for years.

The amount of the fine levied against Intel is certainly massive, but the NYT says it could have been even larger. The European Commission can levy fines as high as 10% of the company's total revenue. With sales of $37.6 billion in 2008, the fine could have reached nearly $4 billion.

Fines collected by the commission are added to its budget, which is around €130 billion reports the NYT. Kroes said, "Now they [Intel] are the sponsors of the European taxpayers."

The huge fine will also serve as a warning to other companies facing investigation by the commission. Regulators in the EU are some of the strictest enforcers of antitrust law in the world. The NYT reports that the EU is so much tougher on antitrust that U.S. firms often file allegations in Europe rather than in America. Intel is also facing inquiries in the U.S. from the FCC over similar allegations.



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Finally!
By Eckstein on 5/13/2009 9:27:34 AM , Rating: 4
I wish that AMD would profit from these fines and that individuals would be held responsible.

But at least we finally got a court ruling on this.




RE: Finally!
By Ordr on 5/13/09, Rating: -1
RE: Finally!
By crystal clear on 5/13/2009 9:55:47 AM , Rating: 2
"AMD's success is going to be predicated on their own ability to execute their roadmap and continue to bring innovative technology to the market,"


RE: Finally!
By omnicronx on 5/13/2009 10:07:02 AM , Rating: 5
Everyone always says that, but forgets they WERE in that position 4-5 years ago. Don't get me wrong, they royaly screwed up with barcelona, but AMD never really had success even when they were doing everything right. I really doubt this case would have ever gone this far if this were not the case. It is pretty hard to argue that Intel is being anti competitive if you don't have a competitive product in the first place.(which they did throughout the original A64 line)


RE: Finally!
By crystal clear on 5/13/09, Rating: -1
RE: Finally!
By eyebeeemmpawn on 5/13/09, Rating: -1
RE: Finally!
By RyuDeshi on 5/13/2009 3:31:57 PM , Rating: 5
When Intel pays companies to not use them.


RE: Finally!
By foolsgambit11 on 5/13/2009 4:55:35 PM , Rating: 3
quote:
When will your success not depend on your ability to execute and innovate in the semiconductor industry?
When you're the victim of anti-competitive practices.

Of course, at heart is that AMD needed to execute perfectly for more than a product cycle. Product purchase choices are based on brand loyalty and trust in a company, as well as superior product. Would you buy a Chinese car, for instance, even if it did crash test as well or better than comparable offerings from Toyota? I'll personally wait until the company has produced several world-class products and I can trust the reliability of the product in the long-term.

In a developed market, you don't come out with a single great product and suddenly sweep up all of the market share. You have to build market share slowly by being consistently great.

That said, I've bought AMD products more often than not since the days of the K6-II (thanks Anandtech for candid reviews for more than a decade!). Partly based on price (I was a poor college student back then) and partly on principle. Nowadays, since I don't game as much, and my computer needs are barely more than web browsing, it's back to price, and AMD is definitely competitive.


RE: Finally!
By croc on 5/13/2009 7:54:14 PM , Rating: 1
You can make the best mouse trap in the world... But if you can't produce them fast enough to fill the orders, then the second best mouse trap will gain market share.


RE: Finally!
By HotFoot on 5/15/2009 4:45:58 PM , Rating: 2
Back when AMD was the performance king, I was buying a new rig. I really wanted that first X2 3800+ when it hit the market, but it was 50% more expensive than the Pentium D 820, and it didn't have 50% better performance. The same goes for much of the rest of their lineup as I started investigating price/performance. Price/performance only started to show up on these tech sites after the Core 2s came out. And that's me not buying a Dell or HP, but buying the components and building the computer myself.

So, unless you weren't on a tight budget, the AMD didn't make a lot of sense back when they were on top.


RE: Finally!
By stimudent on 5/13/09, Rating: 0
RE: Finally!
By inperfectdarkness on 5/13/2009 10:19:44 AM , Rating: 1
you know...that's an awesome idea.

anti-trust legislation should reward the spoils to the competition--NOT the consumers. that's probably the fastest, most productive way to push for a balance in the marketplace. the monopoly is losing; the upstart gaining. it's about the quickest way to help close the "gap" between them.

all we need is to regulate that said spoils go to infrastructure--NOT employee compensation packages.

besides...when was the last time you heard of any consumer actually reaping anything significant as the result of anti-trust litigation--DIRECTLY.


RE: Finally!
By AstroGuardian on 5/13/2009 10:54:59 AM , Rating: 3
Noo!! Wrong. It's catastrophic idea. The reward should not go to the competition and put them in advantage. The consumers are the victims here and not the competition. The competition did not succeed to offer quality products and gain the trust of the consumers so the consumers were forced to buy Intel products. And that's why the consumers should be "un-damaged"


RE: Finally!
By inperfectdarkness on 5/13/2009 3:47:33 PM , Rating: 2
so you would rather the money go to the EU?


RE: Finally!
By AstroGuardian on 5/14/2009 10:41:20 AM , Rating: 2
The main question is where money should NOT go. The money should not go to the competition since they did nothing to earn them. SO my answer is YES! The money should go to EU budget so the customers will receive bigger budget for public spending.

The main thing is the money should be taken away from Intel and not go to AMD. That's just.


RE: Finally!
By yomamafor1 on 5/13/2009 11:35:13 AM , Rating: 3
Except that AMD will not see a single cent from the "fine", as all of the money will get into EU's pocket anyway...


RE: Finally!
By GWD5318 on 5/13/2009 11:54:59 AM , Rating: 3
AMD won't see a single cent from the fines imposed by the European Commission, so they will not profit from the ruling in that aspect.

However, where they do stand a great chance of profiting is the opportunity to play on a more level playing field where Intel isn't allow to give OEMs "incentives" to use their products. Now that they have a very competitive mainstream product in the Phenom II, it just might be enough to push them back into the black. I hope.

If nothing else, this ruling will set precedent for future cases.


RE: Finally!
By tastyratz on 5/13/2009 12:11:00 PM , Rating: 3
I believe that would be called Socialism.

I wish that AMD would profit from making a competitive product again compared to recent intel offerings and drive total prices down through a fierce market.That's what I wish didn't go away after Athlon.

AMD, we miss you!


RE: Finally!
By axias41 on 5/13/09, Rating: 0
RE: Finally!
By axias41 on 5/13/2009 4:40:44 PM , Rating: 2
Giving billions of dollars to banks and car companies is not socialism, when other banks and car companies don't receive anything?

Now, underrate this post, if you feel better.


RE: Finally!
By Khato on 5/13/2009 8:37:03 PM , Rating: 2
quote:
But at least we finally got a court ruling on this.


Uhhhh, no.

Last I checked, the European Commission is the executive branch of the European Union. In this case, its responsibility is to investigate the complaints made against Intel and decide upon a course of action, a fine. Now that this is done, Intel finally gets to appeal the decision to the Court of First Instance, where there will at long last be actual legal scrutiny of the evidence and proper interpretation of European Union anti-trust law.


I actually agree with this one...
By VaultDweller on 5/13/2009 9:59:05 AM , Rating: 5
While I think the EU's fines and constant interference with Microsoft are total BS, but in this case I do agree that Intel was in the wrong and needed to be penalized... maybe not $1.4 billion penalized, but penalties were in order.

Intel was essentially bribing OEMs not to use competing products, and AMD has been trying to prove this in various jurisdiction for years. If this behavior isn't an anti-competitive abuse, I don't know what is.




RE: I actually agree with this one...
By crystal clear on 5/13/2009 10:15:09 AM , Rating: 2
quote:
Intel was essentially bribing OEMs not to use competing products


If it is a crime to give a bribe then it is also a crime to recieve a bribe.

So the OEMs/dealers/vendors should also be fined equally & accordingly.

Why spare the OEMs ? they also are involved in this..they also should be penalized as per your thinking.


RE: I actually agree with this one...
By mvpx02 on 5/13/2009 11:02:26 AM , Rating: 5
quote:
So the OEMs/dealers/vendors should also be fined equally & accordingly.


This is where the black & white suddenly becomes gray.

Due to the size of its market share, Intel has a lot of leverage over the OEMs it deals with. Just because they accepted a deal doesn't necessarily mean they really had a choice. Their business depends on a steady flow of Intel products.

Considering Intel's ethics are so poor that they're willing to offer monopolistic bribes to business partners, do you really think they're above taking the next step and strong-arming companies (especially smaller ones) at the negotiation table to get their way.

I'm all for increased accountability, but in cases like this, the line is very blurred.

I certainly believe that every company who is found to have been in collusion with Intel should, at the very least, be fined for not reporting Intel.


RE: I actually agree with this one...
By Pryde on 5/14/2009 2:00:34 AM , Rating: 2
While Market Share certainly has an effect you have to ask why did these OEMs choose to use Intel when AMD had the faster processors?

Was it because AMDs prices were so high?
OEMs sell mostly low priced PCs where price is more important than performance. AMD had no significant price drops until C2D was about to be released.

Could AMD supply enough CPUs to saturate the market?
Simply no, it would of taken years to ramp up to the same production as Intel and OEMs want a reliable supply.

Can AMD stay competitive?
Again no, AMD have released 1 competitive product since C2D (Ph2) but we have yet to see how it will be against Intels yet to be released Core I5.


By eetnoyer on 5/13/2009 11:42:24 AM , Rating: 3
There is a difference between a bribe and extortion. Threat of obliteration qualifies as the latter.


RE: I actually agree with this one...
By omnicronx on 5/13/2009 11:52:06 AM , Rating: 2
Its called extortion. Telling an OEM you will take away their lowered pricing if they did no agree to your terms is illegal. How on earth can these companies compete if they no longer have a competitive advantage against those that agreed to Intel's terms?


RE: I actually agree with this one...
By crystal clear on 5/13/09, Rating: 0
RE: I actually agree with this one...
By BZDTemp on 5/13/2009 3:05:20 PM , Rating: 2
Sine the US is the biggest OPEC customer I think that job falls on the US side of the Atlantic.

As for Russia they are being dealt with but it will take time and essentially things will not really change until they become a democracy. Russia still consider them self a super power so they act like a bully towards everyone not kissing their behind. Just look at their constant provocations with cold war bombers.

Eventually Russia will turn around since their leaders can not supply their citizens with the life they see in the countries they compare them self with. Geographically Moscow is in Europe and before the dictators Russia had close ties with western Europe.


RE: I actually agree with this one...
By crystal clear on 5/13/2009 8:02:06 PM , Rating: 2
quote:
Sine the US is the biggest OPEC customer I think that job falls on the US side of the Atlantic.t


Then even in Intel's & Microsoft case as per your thinking-that job falls on the US side of the Atlantic.

Why does the EU pick American companies to fine them & ignores the OPEC & the Russians.

If Intel was a Russian company I am quite sure the EU would think twice before fining them out of FEAR of recieving a even more harsher response from PUTTIN,


By Danish1 on 5/14/2009 2:38:33 AM , Rating: 2
Because AMD filed a complaint duh RTFA.

I don't think AMD has filed any complaints about OPEC's oil prices.

and btw I don't think OPEC is threatening/bribing anyone that buys Norwegian oil.


RE: I actually agree with this one...
By ATC on 5/13/2009 4:44:34 PM , Rating: 3
I read an article recently that went further and said that Intel not only bribed these OEMs but strong-armed them into it. Essentially, OEMs that didn't go along with Intel's bribes and kickbacks to squeeze out Intel's competition, saw themselves facing punitive measures by being cut off from Intel products; not totally but they saw product order backlogs, reduced stocks/availability etc... OEM's aren't in the clear but they were certainly put into a difficult position by Intel; either be in on Intel's little game or be cut off. As much as I am a fan of Intel's products, to say they were in the wrong on this is a major understatement.

If nothing else, this ruling will pave the way for direct AMD lawsuits against Intel and that will somewhat help out AMD but not to the extent that they will make up for all the losses handed to them by Intel's unethical practices.


Who sponsors whom
By crystal clear on 5/13/2009 9:46:22 AM , Rating: 1
quote:
"Now they [Intel] are the sponsors of the European taxpayers."


It should read "Now Intel are the sponsors of tomorrow for the European Commission expenses.

Eat,drink & enjoy cause Intel will be paying the bills.....




RE: Who sponsors whom
By BZDTemp on 5/13/2009 3:13:13 PM , Rating: 2
quote:
quote: "Now they [Intel] are the sponsors of the European taxpayers."


Big whoop!

The fine comes to less than three US dollars per EU citizen. Like that really matters.


RE: Who sponsors whom
By iFX on 5/13/2009 3:21:02 PM , Rating: 1
You're right. Stealing 1.45 billion dollars doesn't matter.


RE: Who sponsors whom
By mars777 on 5/13/2009 4:57:07 PM , Rating: 2
You're probably right.
Because breaking laws is allowed, fining for breaking laws is like stealing.


RE: Who sponsors whom
By crystal clear on 5/13/2009 8:40:11 PM , Rating: 2
YES indeed when the prosecuting attorney is also the judge.


RE: Who sponsors whom
By mars777 on 5/15/2009 4:28:39 PM , Rating: 2
I think it really doesn't matter.

A child that can read a book about monopolistic practices could be the judge, prosecution attorney and defendant attorney.

The result would be the same.


RE: Who sponsors whom
By iFX on 5/27/2009 5:02:56 PM , Rating: 2
A conflict of interest matters as much as the so called anti-competitive practices Intel has been accused of.

Basically, you can't call someone on an ethics violation and then commit one yourself. A child could read an ethics book and understand that.


RE: Who sponsors whom
By crystal clear on 5/13/2009 8:09:31 PM , Rating: 1
YES it does matter-Its big money for a company that works very hard to earn it.

Raise taxes by 3 dollars per EU citizen in the EU to sponsor the EU commission.


Scared $hitless
By eetnoyer on 5/13/2009 11:38:11 AM , Rating: 3
Intel ought to be terrified by all of the comission rulings and the pending case in the U.S. Assuming that I'm reading things correctly, if AMD prevails in the U.S. court case at proving tortious interference on the part of Intel, they could use the findings as cause to terminate the x86 cross license agreement.

Given the timeline, AMD's claims would take precendence over Intel's claims regarding the foundry spinoff. I wouldn't be surprised if Intel's claims for terminating the agreement a couple of months ago are nothing more than an attempt to pressure AMD to drop the antitrust suit.

I doubt that it would ever get so far, but imagine what would happen if Intel lost the rights to the past 10 years of AMD IP, while AMD retained all of their rights to Intel IP. At the very least, it should make the renegotiation of the cross license agreement very interesting.

BTW, does anyone know when the antitrust suit in the U.S. is schedule to go to trial?




RE: Scared $hitless
By Dribble on 5/13/2009 11:46:13 AM , Rating: 2
Na, in the US they can just pay off all everyone investigating it, and will get away with a meaningless slap on the wrist.


RE: Scared $hitless
By mvpx02 on 5/13/2009 11:48:36 AM , Rating: 2
quote:
BTW, does anyone know when the antitrust suit in the U.S. is schedule to go to trial?


March of 2010 last I heard


RE: Scared $hitless
By Pryde on 5/14/2009 2:13:30 AM , Rating: 2
quote:
imagine what would happen if Intel lost the rights to the past 10 years of AMD IP, while AMD retained all of their rights to Intel IP.


Now that would be very anti competitive.


Ridiculous
By Funksultan on 5/13/2009 10:20:18 AM , Rating: 2
Is it me, or is this starting a pattern of the EU levying ridiculous fines against companies that will be impossible to enforce?

MS, now Intel... next week they will fine McDonalds 40 billion, after that Starbucks for 1.2 trillion, and down the road, Disney for 8 quadrillion.

EU, if you're that serious about going after these megacorporations, talk about it in a world forum. Until then, you're just going to come across like a little kid making rules about conduct in your treehouse. I doubt the adults will take you that seriously.

D




RE: Ridiculous
By Nathanael349 on 5/13/2009 10:32:29 AM , Rating: 1
The european GDP is 18,4 trillion, compared to 14,2 trillion of the USA. I'd hardly call it a treehouse ;) .


RE: Ridiculous
By mars777 on 5/13/2009 3:32:14 PM , Rating: 3
More than that, the revenue of Intel in the EU is higher than that in the US.

So i say that Intel leaving the EU because the EU does not permit anticompetitive behavior is just an utopia.

If Intel wants to make more money it will pay the fine and continue to sell there, but this time it will be a bit more cautious before breaking laws... (or maybe delete law breaking emails more carefully).


RE: Ridiculous
By Danish1 on 5/14/2009 2:52:28 AM , Rating: 2
It's you who don't understand these fines are given based on anti competitive complaints filed by other US companies.

If I'm not mistaken the whole windows/browser fiasco was started by a complaint filed Real(Player), but I could be wrong about that.


Fine
By sapster86 on 5/13/2009 11:44:05 AM , Rating: 2
so who actually gets this money?




RE: Fine
By wookie1 on 5/13/2009 12:18:40 PM , Rating: 2
The commission that levied the fine gets the money. It is added to their operating budget. There's never a downturn in the trust-busting business!


RE: Fine
By Motoman on 5/13/2009 12:31:20 PM , Rating: 2
I'm not a lawyer, so forgive me if this doesn't make sense...

...but given that a criminal verdict has been reached on this in AMD's favor, can AMD not sue Intel in maybe a civil suit or something, seeking damages from Intel's established criminal activities (which obviously damaged AMD)?


RE: Fine
By mvpx02 on 5/13/2009 1:20:12 PM , Rating: 2
As far as I know, they can sue Intel in Europe now. They have already filed suit against Intel in the USA.


amd
By Beno on 5/13/2009 12:57:01 PM , Rating: 3
im from middle east. do you know that you cant find anybody selling amd stuff here? :D
i only know two stores that sells amd products, but not all of their models, while everybody have full intel lineups.

i dont think both of them care about the market very much here. and know if it has to do with this case, but just wanted to point out.




RE: amd
By Beno on 5/13/2009 12:59:14 PM , Rating: 2
dont know if*..


By Zagor Tenay on 5/13/2009 1:56:34 PM , Rating: 5
I am amazed at the lack of common sense, the level of selfishness, greed and political ignorance of some Americans and I hope they do not constitute the majority. Otherwise this would have severe consequences on the society (and the world of course) in the long term.
How can you explain all that foolish blubber about socialism and communism?
How can you support ugly and dirty business practices of Intel?
The answer is simple: No, you can't!
The bottom line is that, this huge fine is a very strong warning for Intel and they will not be able to get away with all their evil actions any more. This is a great success for AMD and good news for the end users, no doubt about that.




By Aloonatic on 5/13/2009 9:41:20 AM , Rating: 1
I mean, who else is going to pay for stuff like this?

http://news.bbc.co.uk/1/hi/uk/7904886.stm

http://www.telegraph.co.uk/news/worldnews/1579537/...

/trolling :-D




By euczechguy on 5/13/2009 9:49:18 AM , Rating: 1
Right...

I wish we recieved more of those "donations"...

So long, monopoly... :D LOL

Btw, I wanna see the flamers from US on this one... LOL


By npoe1 on 5/13/2009 11:52:48 AM , Rating: 2
What a relief, I though that only happened on my country.


By crystal clear on 5/13/2009 11:43:29 AM , Rating: 1
The European Commission is the prosecuting attorney & JUDGE with Intel as the defendant.

Now how can prosecutor be a judge to give a fair unbiased judgement.

If Intel is guilty of-

* Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs processors from Intel.

* It also made direct payments to a major retailer on condition it stocked only computers with its x86 CPUs. This effectively prevented customers - and ultimately consumers - from choosing alternative products.

* Intel paid computer manufacturers to halt or delay the launch of specific products containing competitors' x86 CPUs and to limit the sales channels available to these products.

* Computer manufacturers affected includes Acer, Dell, HP, Lenovo and NEC. The retailer concerned is Media Saturn Holding, owner of the MediaMarkt chain.



http://www.reuters.com/article/ousiv/idUKTRE54C3II...

So according to the E.U. Intel is guilty then even the OEMs/dealers/vendors/retailers are guilty of recieving payments/rebates from Intel and assisting Intel in closing the deals.

Just as it is a crime to give a bribe its also a crime to recieve a bribe.

So why spare the OEMs/retailers etc - fine them also, even they are guilty.

For those interested in reading the EU commission report-

Antitrust: Commission imposes fine of €1.06 bn on Intel for abuse of dominant position; orders Intel to cease illegal practices

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.

Moreover, in order to be able to compete with the Intel rebates, for the part of the computer manufacturers' supplies that was up for grabs, a competitor that was just as efficient as Intel would have had to offer a price for its CPUs lower than its costs of producing those CPUs, even if the average price of its CPUs was lower than that of Intel.

For example, rival chip manufacturer AMD offered one million free CPUs to one particular computer manufacturer. If the computer manufacturer had accepted all of these, it would have lost Intel's rebate on its many millions of remaining CPU purchases, and would have been worse off overall simply for having accepted this highly competitive offer. In the end, the computer manufacturer took only 160,000 CPUs for free.

As a result of Intel's rebates, the ability of rival manufacturers to compete and innovate was impaired, and this led to reduced choice for consumers.

Rebates such as those applied by Intel are recognised in many jurisdictions around the world as anti-competitive and unlawful because the effect in practice is to deny consumers a choice of products.



http://europa.eu/rapid/pressReleasesAction.do?refe...




RE: When the prosecuting attorney is also the judge
By mars777 on 5/13/2009 3:35:03 PM , Rating: 2
Going after the small ones is like going after 10$ crack dealers on the streets and not focusing on the big guys corrupting the world.

Common sense says to stop the thing at the Head when you have opportunity.


By crystal clear on 5/13/2009 8:22:40 PM , Rating: 1
Common sense says-

Whilst catching the big fish & you can catch the smaller fishs also at one time in the same net,then do it -why not.

Here in this case Intel & the OEMs etc all in one catch.

You bring in even more money as fines in the bargain when you have the opportunity.

Thats the objective of the EU - MORE MONEY through fines.


Where's the $1.5B going
By siliconvideo on 5/13/2009 10:14:07 AM , Rating: 1
Assume Intel pays this fine, where's the cash going to go? The the only other major CPU manufacturer, AMD....To the people of Europe via subsidized purchases of computers.....To pockets of the bureaucrats pushing this fine. This is simply another way to tax a profitable company making stuff that is superior to the competition and charging what they think they can charge. If the AMD product was so good why aren't they the dominate supplier in Europe.





RE: Where's the $1.5B going
By mars777 on 5/13/2009 3:26:47 PM , Rating: 2
quote:
If the AMD product was so good why aren't they the dominate supplier in Europe.


Jesus Christ, you really do not understand.
It is simply because Intel used its monopolistic position to extort more marketshare even though it had (at the time of A64) a patetic product. It just used its monopolistic behavior to gain marketshare instead of a better product.

In a sector where there are few companies you can have a monopoly or an oligopoly. Both are OK untile those participating in them do not use anticompetitive behavior to gain more market share.

It is just a matter of Power and Control, not Ability and Performance.


About time.
By karielash on 5/13/2009 9:24:01 AM , Rating: 2

About time someone jumped on Intel, the US is sure to follow now.




Irony at its best
By Steve73 on 5/13/2009 9:37:07 PM , Rating: 2
All right hear me out. No one can reasonably argue that Intel is not a monopoly, because there is no real competition. Sorry AMD. I personally think that Anti-trust laws in the US have been broken for some time and really should focus on breaking up monopolies into more competitive parts, but that is a different topic.

However, the EU or the court that represents them has no argument either, since the line between the governments that make up the EU and its businesses is so blurred. For example, the US industry just got bailed out, that is the U.S. government is now subsidized the U.S. car industry. What would stop Japanese car makers from making a similar argument of antitrust violations? Aren’t the Japanese at a disadvantage when competing with the US car companies who are now subsidized? Granted, I do not know if Japanese companies are subsidized by the Japanese government. If they aren’t, then they are at a disadvantage. How can a group of nations that subsidize a greater portion of their economies argue about antitrust laws when they themselves our not able to compete in a fair environment?




What the !@#$% is that?
By Calin on 5/14/2009 3:42:01 AM , Rating: 2
"The huge fine will also serve as a warning to other companies facing investigation by the commission"

This is a warning to other companies that intend to do anti-competitive business in the European Union.
It's not like a jail sentence is a warning for other people that get dragged into court - it's a warning that the felonies are punished.




Yikes
By Brandon Hill (blog) on 5/13/2009 9:21:34 AM , Rating: 1
quote:
Kroes said, "Now they [Intel] are the sponsors of the European taxpayers."


<Rick James> "Cold blooded!" </Rick James>




By Beenthere on 5/13/2009 3:19:37 PM , Rating: 1
You can bet that Intel achieved a lot more than $1.5 Billion from their violation of anti-trust law in Europe let alone in the U.S. and Asia. Until these countries fine both Intel and Microsucks $500 Billion each, they will continue to violate anti-trust laws because it is extremely profitable to do so, even with a $1.5 Billion fine.




MONEY
By zorblack on 5/13/2009 3:45:58 PM , Rating: 1
This is a good way to come out of a budget shortfall huh?




Idea!
By DuctTapeAvenger on 5/13/2009 4:00:53 PM , Rating: 1
It seems that the EU has come up with a brilliant plan which I think the US needs to copy. We must pay off our national debt by taking it from large foreign companies that do business here. They should start a list of successful companies, and just start at the top.




DT journalism
By VitalyTheUnknown on 5/13/09, Rating: -1
RE: DT journalism
By theapparition on 5/13/2009 1:19:33 PM , Rating: 1
quote:
Fines collected by the commission are added to its budget, which is around €130 billion reports the NYT. Kroes said, "Now they [Intel] are the sponsors of the European taxpayers."

She actually said that. It's not made up.

Shame on you for standing up for someone who's department clearly has ulterior motives besides the european "consumers".


RE: DT journalism
By crystal clear on 5/14/2009 9:04:43 AM , Rating: 2
Here the evidence to prove that she did say exactly -

"Now they [Intel] are the sponsors of the European taxpayers."



Kroes: Intel Now "Sponsor of the European Taxpayer"

http://www.youtube.com/watch?v=ReBN51NY2-A&feature...

quote:
DT readers please research on this subject before you post your idiotic comments on how you hate Europe


Tell that to yourself before you accuse people here of posting idiotic comments.


Competition
By ZachDontScare on 5/13/09, Rating: -1
RE: Competition
By mars777 on 5/13/2009 3:47:31 PM , Rating: 4
quote:
If these rebates were so 'anti-competitive', why wasnt AMD offering the same thing? Intel wasnt putting a gun to anyone's heads - they were just playing hardball


Let me give you an example:

- you are an OEM
- a am Intel and have 80% of market share
- John is AMD and has 15% of market share
- You sell roughly the same percentage of products as our marketshare
- I offer you 15% discount if you don't sell Johns stuff
(this is more than the profit from John)
- Do you reject?
(if you dont reject you sell the same amount of stuff because there is demand but you gain 15% more profit, I loose 15% profit but gain 15% marketshare and that covers it)
- If you don't reject, try this in the other way:
- Would you accept the same deal from someone who has 15% market share?
(that 15% from John equals somewhere like 3% of the profit from the other supplier... you loose profit)

Well, you just learned what does anticompetitive monopolistic behavior stand for.

Why is this illegal? Because consumers did not have choice to buy Johns stuff, and less choice means the only supplier can set prices higher. After that consumers loose money, not only choice.


RE: Competition
By mars777 on 5/13/2009 4:54:25 PM , Rating: 2
And if there is no choice, customers will still buy the product offered since they need it, no matter the price.

There is to note that the increased price is only transferred to the customer, not you. Since you gain more margin if the prices increase.


RE: Competition
By foolsgambit11 on 5/13/2009 5:07:05 PM , Rating: 2
quote:
If these rebates were so 'anti-competitive', why wasnt AMD offering the same thing?
Because AMD didn't have the market share to offer the same thing. They couldn't have provided 100% of Dell's chips to begin with, most likely, but more to the point, a company like HP could survive without any AMD in their lineup, but they wouldn't without any Intel. Because of Intel's market position. That's why this is an anti-trust issue. Intel used its market position to engage in anti-competitve business practices. They used their market position to keep other businesses (especially AMD) from gaining market share.

Exclusive contracts aren't by definition illegal. But coupled with a sufficiently large share of the market, they can be, since that position effectively coerces the other party in the contract into entering said contract.


I would laugh...
By iFX on 5/13/09, Rating: -1
RE: I would laugh...
By Eckstein on 5/13/2009 10:05:49 AM , Rating: 5
Intel would loose it's biggest market if they pulled out of the EU (not that this ridicules wish makes any sense).

The reason for this court ruling is based on the believe in free markets where competition is alive and not hindered and has been decided by several evidences delivered that Intel did violate legislations related to this.

Your blind hatred against this action clearly shows that you do not believe or understand what capitalism is about.


RE: I would laugh...
By iFX on 5/13/09, Rating: -1
RE: I would laugh...
By Nathanael349 on 5/13/2009 10:28:33 AM , Rating: 5
You don't really get it. This is not about making the market as unregulated as possible as that would be contra-productive and silly. It is about creating a market where and I stress this fair competition is possible, because only that fosters innovation and benefits the consumer. Clearly, allowing what Intel did leads to monopolies, or near monopolies and I don't think I need to explain how monopolies stall innovation and hurt the consumer.


RE: I would laugh...
By iFX on 5/13/09, Rating: -1
RE: I would laugh...
By Proteusza on 5/13/2009 10:47:09 AM , Rating: 3
Yes, thats what its all about. You got it exactly right, congratulations you must be a genius.

Tell me why your own Federal Trade Commission, you know, in the US and A, is investigating Intel for exactly the same reason? Oh thats right, its because the USA hates capitalism too, and y'all are a bunch of commies. Cos, if the FTC is doing same thing as the EU, and the EU = commies, then logically the US FTC is also full of commies.

And that means both South Korea and Japan are also commies, because they even found Intel guilty already. Guess some commies work faster than others hey?


RE: I would laugh...
By iFX on 5/13/09, Rating: -1
RE: I would laugh...
By Eckstein on 5/13/2009 10:55:26 AM , Rating: 2
I can only speak for myself, but I vote for a libertarian party here.
Too bad that this doesn't fit in your twisted and absolutistic view on the world!


RE: I would laugh...
By Proteusza on 5/13/2009 12:12:34 PM , Rating: 4
Ba ha ha ha! Now you are the victim!

I guarantee you that the majority. DailyTech's readership is made up of 18-30 year old males in the USA. If that makes them "socialist", then so be it.

Intel's actions were in fact anti capitalist, since they harm the free market. Capitalism works on the concept of a free and fair market, Intel isnt so keen on that.


RE: I would laugh...
By Nathanael349 on 5/13/09, Rating: 0
RE: I would laugh...
By iFX on 5/13/2009 10:54:04 AM , Rating: 1
Microsoft and IBM, circa 1980 - aka - David and Goliath.

Point, set, match.

Large corporations to not stifle innovation - this is just a lie perpetuated by those who believe that every success a corporation has created for itself actually should belong to some kid in a basement.


RE: I would laugh...
By Nathanael349 on 5/13/2009 11:01:50 AM , Rating: 2
Yes, but Microsoft only succeeded due to anti-trust regulation. If IBM could pay retailers not to sell microsoft's OS they wouldn't exist and innovation would be stifled. ;)

Go back and re-read my post and you'll see I'm not saying that the existence of large corporations stifles innovation. I'm saying market abuse does.

This is the argumentative fallacy you committed:
http://en.wikipedia.org/wiki/Straw-man_argument


RE: I would laugh...
By iFX on 5/13/2009 11:05:37 AM , Rating: 2
You have never seen me state that anti-trust legislation is bad. You made that assumption though, which is the fallacy of your character.

Microsoft's success was perpetrated primarily through their resourcefulness and ability to offer products people wanted to buy - and no huge corporation could stop them.


RE: I would laugh...
By Nathanael349 on 5/13/2009 11:12:18 AM , Rating: 2
I haven't assumed that. You yourself in your first (or second) post claimed that the best market is an unregulated one - anti-trust regulation is regulation no matter how you look at it. You've just shifted your position by a mile right now ;) (debating 101, don't do that :P ).

You do realize that what Intel did flies in the face of anti-trust regulation right?

This is my last reply, exam season ;) .


RE: I would laugh...
By iFX on 5/13/2009 11:16:42 AM , Rating: 2
You have assumed it, foolishly I may add. Now that you have no argument you are baiting on semantics to move focus away your own failure to bolster your misguided and factually incorrect points. My words are there to read and however you may misquote them the original text of course can't be changed.

Of course this is your last post. Flame and run. Typical.


RE: I would laugh...
By omnicronx on 5/13/2009 11:40:04 AM , Rating: 3
quote:
Now that you have no argument you are baiting on semantics to move focus away your own failure to bolster your misguided and factually incorrect points.
Haha, thats exactly what you are doing by going off on this tangent.


RE: I would laugh...
By iFX on 5/13/2009 12:57:27 PM , Rating: 1
Let me get you back on track then since you have ADHD. This is something I stated a few posts up. Just so there is no confusion.

quote:
Microsoft's success was perpetrated primarily through their resourcefulness and ability to offer products people wanted to buy - and no huge corporation could stop them.


RE: I would laugh...
By omnicronx on 5/13/2009 11:10:13 AM , Rating: 2
quote:
Point, set, match.
Microsoft was found guilty of being anti competitive and stifling competition, try again.

Please do not put IBM in the same boat as either. If not for them Intel would be the ONLY CPU maker in the market. IBM single handedly made competition possible by not allowing Intel to be the only CPU maker for their PC's.

You point does not prove anything, there is no rule set in stone that large corporations stifle competition, but that does not mean it does not happen. Intel has admitted to all the charges (rebates, incentives etc, exclusivity deals), they just don't think it is illegal, because it is the 'nature of the cpu industry'. The problem is this is an industry THEY CREATED so this is not a defense at all.


RE: I would laugh...
By iFX on 5/13/2009 11:20:02 AM , Rating: 1
Please don't expect me to seriously consider that argument.

The original point was offered that large companies stifle competition. Microsoft is the perfect example during their early years. Whatever they may or may not be guilty of later in their history is irrelevant to the fact that they did indeed take on IBM and that IBM was unable to stop them.

Try again please, troll.


RE: I would laugh...
By omnicronx on 5/13/2009 11:48:35 AM , Rating: 2
quote:
Microsoft is the perfect example during their early years. Whatever they may or may not be guilty of later in their history is irrelevant to the fact that they did indeed take on IBM and that IBM was unable to stop them.
Thats the most ridiculous claim ever made. Of course it matters what they did later on in history. The MS antitrust case was at the peak of their dominance, are you really trying to imply that this does not count? When a large company stifles competition is irrelevent, the fact remains that MS was charged with anticompetitive activity and was forced to cease and desist. You have absolutely no argument here.

Furthermore take on IBM? They were partners! They made an OS together (OS/2)! HP and PC clones were the reason for the demise of IBM computers. By the early 90's (i.e well before the end of their partner ship) IBM was no longer THE player in the industry. You are kidding yourself if you think otherwise.


RE: I would laugh...
By iFX on 5/13/2009 12:50:35 PM , Rating: 1
Are you stupid? We aren't talking about 90s MS. We are talking about 80s MS, when they were nothing, when IBM was a billion dollar organization and MS was in the red. The point is that despite IBM being huge and at the time controlling the PC market MS was able to thrive and survive anyway. They are the perfect example of why big business does not stifle innovation and that singular big business won't be in control forever, other companies will form and grow and that they all start small, against the odds.

Yes, MS took on IBM. Learn the history - what was portrayed in the film that you are no doubt remembering isn't accurate. Learn why Windows was a success and OS/2 was a failure for IBM.

Why am I talking to you? Pillock.


RE: I would laugh...
By omnicronx on 5/13/2009 2:34:17 PM , Rating: 2
You are seriously full of yourself. IBM and MS were partners! IBM chose to use DOS and eventually windows, how on earth can you say there were in competition, especially in the 80s?

IBM was never in direct competition with MS until the OS/2 joint venture was done with, and guess what, that was in the 90's. By that time Windows was a powerhouse, and IBM's OS/2warp never went anywhere.

Furthermore IBM is not the 'perfect' example. They attempted to close out the industry by not allowing PC clones. If not for that innovation would have been stifled as they would have completely controlled the PC market.

So take your own advice and learn your history.

P.S The original OS/2 was the IBM/MS joint venture until 1990. Once again proving your statements incorrect.


RE: I would laugh...
By iFX on 5/13/2009 3:12:55 PM , Rating: 2
You can't read or don't read.


RE: I would laugh...
By omnicronx on 5/13/2009 3:48:29 PM , Rating: 2
Don't you get it? I'm disproving your entire theory. Your entire David vs Goliath theory cannot be correct as they were essentially partners throughout the 80's.

It was not until Microsoft was already a giant that they parted their ways (i.e they were not the little guy, they already controlled the OS market).

IBM tried to control the market and failed to stop PC clones.

MS tried to control the market and was slapped with court orders and fines for being anticompetitive.

And finally Intel tried to control the market and here we are today.

Every single one of these companies tried to get rid of their competition, and most likely would have resulting in the stifling of innovation. It happened with MS getting lazy in the late 90's, happened with Intel getting lazy in the p3/p4 years and it quite possibly could have happened had IBM got their way and made PC-clones illegal.


RE: I would laugh...
By xti on 5/13/2009 11:08:54 AM , Rating: 2
is it cold there?


RE: I would laugh...
By VaultDweller on 5/13/2009 11:34:35 AM , Rating: 2
Microsoft didn't compete head to head with IBM, and in fact IBM was one of their most important clients.

Microsoft's success wasn't a story of David beating Goliath - they never had an established dominant player that they had to overcome. David didn't beat Goliath, David seized an emerging market long before Goliath ever realized that market existed, let alone had any potential.


RE: I would laugh...
By mars777 on 5/13/2009 3:58:05 PM , Rating: 2
Well said.


RE: I would laugh...
By omnicronx on 5/13/2009 10:58:21 AM , Rating: 2
Wake up? Apparently you've been asleep for the past 8 years. AMD filed suit against Intel in 2005, and the EU's antitrust case has been going on since 2001. Intel did NOT have winning products, and their business strategy involved paying off companies, and forcing incentives down the throats of OEMS with the threat of taking away these incentives if they use AMD products (or keep them to a certain percentage of their products).

Why on earth would these OEM's make formal complaints if they thought what Intel was doing was legal? All these OEM's had to agree with Intel or face the possibility of their competition having an unfair advantage. They were obviously scared, that is the only reason to complain, if they really thought what Intel was doing was legal, why complain at all? They were receiving lower pricing afterall?

And what about Dell kicks backs and the internal Intel emails that magically disappeared when US courts ordered Intel to make them available? What about the Intel and Dell emails that told them to keep quiet about these kickbacks? What about charges stemming as far back as 2000 that Intel gave IBM discounts, rebates, special funds and who else knows what for exclusivity? Or perhaps how Intel paid several manufacturers to delay AMD product launches? All of this happened before the Core line.

The EU is not the first country to make such judgments either, both Japan and South Korea already have, and they are still under investigation by the FTC, with antitrust cases from AMD in the works in both the EU and the US. I suppose if all these cases side with AMD that Intel is still in the right, and that those damn socialists are still looking for a cash grab?


RE: I would laugh...
By VaultDweller on 5/13/2009 11:00:54 AM , Rating: 2
This has nothing to do with having winning products. These anti-trust investigations started at a time when Intel most certainly did NOT have a winning product in the processor market. AMD had the excellent Athlon 64 and Opteron lines, and the Pentium 4 and Xeon chips of the time were inferior in almost every imaginable way - they were slower, they consumed more power, they ran excessively hot, and in the case of the Xeon they couldn't scale upwards in multi-socket servers.

When you have a superior product that you can deliver at a more competitive price, it's only right that you should be successful. Intel is in this boat now. Five years ago, AMD was. However, when AMD had a superior product against which Intel could not compete, Intel abused their power to stop adoption AMD product by paying OEMs not to use AMD products. They attempted to make it impossible for a competitor with a smaller market capitalization to enter the market. That is just bad business.


RE: I would laugh...
By finalfan on 5/13/2009 2:18:31 PM , Rating: 2
You just stated half of the truth.

Yes, AMD was having a better product. However, they didn't have the capacity to produce enough CPU to meet the requirement of the market. Gateway had always been a good buyer of AMD CPU, but it had to quit buying AMD twice just because AMD failed to deliver the orders in the holiday seasons. Dell alone grabbed a big portion of AMD CPUs when it started to sell AMD systems. Smaller OEMs have no choice but to buy Intels which are always available. AMD virtually had no inventory in its good days. How come it can complain Intel's business strategy is harming its sells? What AMD really want is a higher ASP which it cannot get when Intel is giving out rebates, as it clearly speaked out in its complain. if AMD was able to produce a similar CPU at the same cost and fill the orders in time, I don't see why AMD can't give the same rebate to OEMs. Unless their cost is too high which is the ultimate reason they cannot compete.


RE: I would laugh...
By mars777 on 5/13/2009 4:09:44 PM , Rating: 2
It is not about cost.

Just try this equation:

You have 20% free production capacity.

You have 80% of products in some dominant OEM.
Can you give discount of 20% and gain the other 20% of products in that OEM?
Yes because you cover up the 20% loss with 20% more market share. The worst that happens is you fulfill your capacity.

You have 20% of products in the same dominant OEM.
Can you give 20% discount and gain 80% more products in that OEM?
You would be glad to do it since profits would go UP hugely.
But NO you cant: it equals to 100% up to 400% more capacity (depending on how dominant the OEM is) and you have just 20% :((


RE: I would laugh...
By mars777 on 5/13/2009 4:37:03 PM , Rating: 2
Forgot to mention that:

Production capacity investments are never higher and never increase more than net profit increase estimation for the next fiscal period (if profit returns for the new capacity are estimated in that period).
Commonly asset costs are high and production capacity does not increase brutally, it almost never increases more than a few percents for advanced tech businesses like chip manufacturers. It is direct R&D cost coupled with operating cost and almost never done in a short period because it's advanced technologies.
If it does you loose money even though you aim to sell more.
You can do this only if you have a lot of capital and are willing to post an ugly fiscal report in hope of fulfilling those new capacities, and that is never guaranteed (recession, product failure...), eg. you can do this only if you arefull of money and can stand share price drops.

And that surely isn't AMD :D


RE: I would laugh...
By finalfan on 5/13/2009 6:24:27 PM , Rating: 2
Intel's huge investment into production enable its 1 year lead in die shrink which gives Intel the advantages of much lower cost and higher capacity.

By the way, I didn't see Intel had "ugly fiscal report" but AMD did.


RE: I would laugh...
By finalfan on 5/13/2009 6:15:36 PM , Rating: 2
It is about cost. If your cost is low enough, you can afford to lower your price to get more market share. For any smaller player, it's a joke to catch 100% share. Nobody plans running on 80% in this industry. If it does, there is trouble. You equation doesn't make sense.


RE: I would laugh...
By Eckstein on 5/13/2009 10:32:01 AM , Rating: 2
So on what facts do you base your statements?
After all you (hopefully) should at least accept that antitrust suits are reasonable in their general sense. Right?

So what in particular was not rightful or justified in this trial and conviction in your opinion? What are your facts which make you believe that the evidence delivered are false and do not justify the fine?


RE: I would laugh...
By ZachDontScare on 5/13/2009 2:40:27 PM , Rating: 1
iFX, you're dead on accurate. This is all about EU bureaucrats lining their pockets. As evidence, notice that the money goes to... the EU. So the EU has a hearing and declares that Intel must pay ... the EU... a billion dollars. Thats some fine 'justice' right there.


RE: I would laugh...
By mvpx02 on 5/13/2009 3:53:54 PM , Rating: 3
Intel broke the law! How do you propose companies be punished for breaking the law? Or should they be allowed to do whatever they want?

If you disagree with where the fine is going, where should the money go? EU is protecting EU citizens. They determined that computer buyers IN EUROPE were forced to pay too much for computers IN EUROPE because of Intel's actions IN EUROPE , so they penalized Intel, and now Intel will pay its fines IN EUROPE .

If they really wanted to "scam"/"steal" money from American companies, they'd just make some sort of tax on ALL Non-European companies. They aren't getting rich fining 1 company at a time every couple of years.


RE: I would laugh...
By finalfan on 5/13/2009 6:46:15 PM , Rating: 2
Nobody is saying EU is getting rich by this. A thief steals and a racketeer scam. They don't have to be rich by stealing and scaming.

So Intel paying OEM rebates actually made EU people pay more? So EU companies must be idiots or they just be too greed to pass on part of the money to their customer. EU needs to prove that had Intel not paid OEM the rebates, the consumer would have paid less. Otherwise, it's stealing and scaming. Anti-trust law is to protect consumer not company nor the government. If EU cannot prove, there was no law broken.


"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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