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Complaint alleges Intel participated in cartel-like business pratices

Intel may end up in legal trouble with Germany's Federal Cartel Office (FCO) over anti-trust activities. Although no probe has been setup, reports say that Germany's FCO has received a formal complaint regarding Intel's business practices.

Just recently, DailyTech reported that the Financial Times Deutschland claimed that a well known reseller in Germany accepted monetary incentives from Intel to discontinue selling AMD-based products. Media-Saturn-Holdings, the parent company of several retail chains was alleged to have leaked a letter showing communications between it and Intel over exclusivity.

According to reports, the FCO did not say who actually filed the complaint. Some analysts say that the complaint relates to the Media-Saturn-Holdings situation. AMD did not say that it was the one that filed the complaint although the company admitted that it did speak with the FCO about Intel's business practices. AMD recently filed a complaint (PDF) and did mention about Media-Saturn-Holdings as well as US electronics retail chain Fry's Electronics participating with Intel in anti-competitive actions.

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hmm...
By Quiksel on 7/12/2006 12:20:12 PM , Rating: 3
perhaps it was the Intel-branded cigars that gave it away?




RE: hmm...
By masher2 (blog) on 7/12/2006 12:32:38 PM , Rating: 2
For an encore, Germany can sue all the Mercedes dealers that refuse to carry Ford and GM products.

Anyone think they will?


RE: hmm...
By AxemanFU on 7/12/2006 12:41:24 PM , Rating: 2
You have to admit it does start to look pretty much like abuse of a monopolistic market position when you try to strongarm distributors and you already have 90%+ of the market. It's just sort of a foolish thing to do, PR wise.


RE: hmm...
By masher2 (blog) on 7/12/2006 12:50:22 PM , Rating: 5
> "when you try to strongarm distributors ...."

Firstly, Media Saturn is a reseller, not a distributor. And no one, not even them or the paper who reported this, is alleging strongarm tactics were used, simply that Media Saturn signed some form of exclusivity agreement with Intel.


RE: hmm...
By bldckstark on 7/12/2006 12:53:31 PM , Rating: 2
No, they are saying they took payment in return for exclusivity. There is quite a difference there.


RE: hmm...
By masher2 (blog) on 7/12/2006 12:55:53 PM , Rating: 2
> "No, they are saying they took payment in return for exclusivity."

Err, why would anyone sign an exclusivity contract without compensation? In fact, even if they tried, it wouldn't be a valid contract...you have to accept something in return or its not legally binding.

You think those Mercedes dealerships in downtown Berlin didn't accept something in exchange for their exclusivity arrangement?


RE: hmm...
By Connoisseur on 7/12/2006 1:16:20 PM , Rating: 2
Correct me if I'm wrong but isn't the legality of exclusivity agreements based on market share?


RE: hmm...
By Targon on 7/12/2006 2:14:35 PM , Rating: 2
If Intel offered better prices due to being exlusive, then it might be considered legal. If Intel offers an up-front pile of cash, then it may not be. I know it may not seem like a big difference, but it's enough. An up-front offer of money tends not to be dependant on how many Intel based products are sold, and only on not selling a competitor's products.

This is why the rebates that have been questioned are not considered fair business tactics. Benefits for selling a certain volume of Intel processors is acceptable, but benefits for not selling a competitor's product is not.


RE: hmm...
By TomZ on 7/12/2006 2:15:56 PM , Rating: 2
It depends on the laws of the individual country. In the US, I think such an agreement would be legal unless the vendor has a monopoly on the market (i.e., ability to determine prices), the agreement causes a decrease in competition, and more harm is done to consumers than good. In this particular case, I would think it could go either way.


RE: hmm...
By Crassus on 7/12/2006 6:03:21 PM , Rating: 2
Sorry, but German law does not know such a rule. If you sign a contract and have it notarized, it's binding, even if you give your house away for nothing in return.


RE: hmm...
By masher2 (blog) on 7/12/2006 6:19:28 PM , Rating: 2
> "Sorry, but German law does not know such a rule. If you sign a contract and have it notarized, it's binding, even if you give your house away for nothing in return"

I'm sorry, but this is incorrect. European contract law is uniform on the subject; a contract requires both parties to be contractually bound. An offer for an offer, an offer for a promise, or a promise for a promise..as the saying goes.

If you write a contract saying "I give you my home", its not legally valid. If you write a contract saying, "I give you my home in exchange for a dollar in hand", its a contract.


RE: hmm...
By ElFenix on 7/12/2006 6:31:16 PM , Rating: 2
in the US that would be nominal consideration, and thus, no contract is rendered.


RE: hmm...
By masher2 (blog) on 7/12/2006 6:56:10 PM , Rating: 2
> "in the US that would be nominal consideration, and thus, no contract is rendered. "

Not quite. I don't want to get into a detailed analysis of benefit-detriment or bargain theory in modern legal thinking, but nominal consideration is more driven by whether or not the consideration was bargained for, rather than a judgement as to its adequacy.

In any case, my primary point is that, without any compensation whatsoever, the contract is unmistakably invalid. In the US and in Europe.


RE: hmm...
By Xavian on 7/12/2006 10:20:45 PM , Rating: 2
i believe they were providing monetary incetives to stop AMD processors from being sold, i don't know where you are from masher2, but where im from thats clear anti-competitive behaviour especially for a company that controls a considerable amount of marketshare in the processor business.


RE: hmm...
By masher2 (blog) on 7/12/2006 10:34:44 PM , Rating: 2
> "I believe they were ..."

And quite willing and eager to believe, are you not? Let's see the evidence. We have a newspaper(Financial Times Deutschland) citing an unnamed source detailing a letter from a third party (Media Saturn) which claims to have an "appropriate agreement" with Intel.

This isn't first or even second-hand information. It's a fourth-hand unsubstantiated claim which, even if true, may not be illegal at all, depending on what the specific terms of that agreement are (which the article doesn't cite).

But don't let us stop you from believing. After all, guilty until proven innocent is a principle worth fighting for, isn't it?


RE: hmm...
By slunkius on 7/13/2006 4:21:46 AM , Rating: 2
omg, not another round of "masher knows it all"
if the source is unnamed, that does not mean it is unknown. You question illegality of agreement, though you did not even see it.

Please let the authorities decide what is legal and what is not, cause you are getting ridiculous with some of your statements.


RE: hmm...
By masher2 (blog) on 7/13/2006 9:45:07 AM , Rating: 2
> "Please let the authorities decide what is legal and what is not"

Let's get something straight here. I'm not the one engaging in a kneejerk rush to judgement. It's the posters in this thread who believe -- on the basis of very sketchy, fourth-hand information -- that Intel is "obviously" guilty of a crime. There isn't even an INVESTIGATION active yet, and you nimwits are already clamoring for heads on a platter.

Intel may or may not be guilty. They may or may not be engaging in the same practice many German firms do daily. But before you begin tossing around wild-eyed claims about snap judgements, look to your own kitchen.


RE: hmm...
By Griswold on 7/13/2006 6:36:14 AM , Rating: 2
masher - prosecutor, advocate and judge - to the rescue!

Reminds me of that "EU vs. MS" campaign you've launched.