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Hardware Intel Appeals Massive $1.45B EU Fine
Shane McGlaun (Blog) - July 22, 2009 12:08 PM
Print E-mail del.icio.us 45 comment(s) - last by troysavary.. on Aug 2 at 5:54 AM
Intel says it plans to pay the fine and get the money back if it wins on appeal

The largest chipmaker on the planet -- Intel -- has appealed the EU ruling that fined it $1.45 billion for antitrust allegations. The massive fine is the largest ever imposed on a company by the EU and stemmed from what the EU calls abuse of its market dominant position against AMD.

The huge charge forced Intel to report a loss for the second quarter of 2009 after posting numbers that were higher than what Wall Street expected. Intel spokesman Chuck Malloy said, "Our position is that the decision was wrong and we said that from the day it was announced. It was wrong on many levels."

Mulloy also said that Intel plans to pay the fine and if it wins on appeal, it will get the money back from the EU. A spokesman for the European Commission said that the body "is confident that its antitrust decision against Intel is legally watertight."

Reuters quotes Intel spokesman Robert Manetta saying, "We believe the European Commission misinterpreted some evidence and ignored other pieces of evidence."

The fine was levied against Intel after an eight-year investigation concluded. Some analysts believe that the EU ruling could pressure American legal agencies to take action against Intel. Reuters reports that the FTC and the New York attorney general's office are both investigating Intel.

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This article is over a month old, voting and posting comments is disabled
By uhgotnegum on 7/22/2009 2:08:39 PM , Rating: 2
So...I guess my question is where does this money go once the EU has deposited it?

Layperson logic would suggest that the money would go to boost AMD's market position--or perhaps more accurately, reduce Intel's--seeing as how that was the reason for the fine in the first place. So, is that what will happen, or will the money go to subsidize EU supported agenda items, be distributed to specific countries (based on the impact Intel's no-nos had on their respective economies), be converted to gold coins and dollar bills and be stored in a large "bin-like" building for swimming and diving, or some other thing.

All kidding aside, does anyone know (oh, and I apologize in advance if one or more read links answer my question...if so, bash away)




By BZDTemp on 7/22/2009 2:32:37 PM , Rating: 2
The money goes into the EU budget which then again means it will benefit all the members of the EU eg. the almost 500,000,000 people living in the EU.

It is simply a fine and it is not ear marked in any way and as this was not AMD suing Intel of course AMD does get them.


By Major HooHaa on 8/1/2009 8:38:09 AM , Rating: 2
I get the impression that some parts of the EU politics has been a bit of a gravy train for those who are on it. So the E.U's image isn't squeaky clean.

Also to fine a company that has made money in a time of global financial meltdown, seems a bit silly to me.


By brshoemak on 7/22/2009 8:36:52 PM , Rating: 2
quote:
[The fine will] be converted to gold coins and dollar bills and be stored in a large "bin-like" building for swimming and diving, or some other thing.


To be built in Scotland by Scrooge McDuck of the clan McDuck. Seriously though, has anyone ever compared the fines the EU levies against companies vs. the entire GDP of the EU (or whatever metric they use)? That would be an interesting percentage to say the least. Of course AMD will receive none of it even though they are the "victims" in this situation but not the defendants in this case.


Why an image of Windows 7?
By stubeck on 7/22/2009 12:15:08 PM , Rating: 2
Seems to be about Intel and not Microsoft or Windows.




RE: Why an image of Windows 7?
By Brandon Hill (blog) on 7/22/2009 12:21:45 PM , Rating: 2
Image went to the wrong article ;)


RE: Why an image of Windows 7?
By stubeck on 7/22/2009 12:43:33 PM , Rating: 2
Ahh, fair enough :)


Why the difficulty
By stimudent on 7/22/2009 6:09:37 PM , Rating: 2
Why do Intel and Microsoft have such a hard time behaving ethically in the marketplace?




RE: Why the difficulty
By porkpie on 7/23/2009 7:16:21 AM , Rating: 1
Probably because the EU's definition of unethical is "whatever a dominant firm like Intel or Microsoft does".

Had AMD done exactly what Intel did, the EU wouldn't have given it a second thought (note: this is plain fact admitted by the EU Commission, not my own personal opinion).


AMD vs Intel
By EglsFly on 7/23/2009 1:31:15 AM , Rating: 3
What ever happened to the lawsuit AMD filed against Intel a couple years ago about this same issue?




er...
By sprockkets on 7/22/2009 12:15:47 PM , Rating: 2
Ran out of Pics? A Win 7 install screen?

Maybe you should bring back fond memories of Intel vs. VIA and show a picture of the balloon incident - you can find it on your fellow anandtech.com trade show section.




A Joke on All of Us
By oserus99 on 7/22/2009 8:56:02 PM , Rating: 1
This is a complete farce of the legal system. The deals that Intel offered were accepted by companies. This was not a one sided deal. These companies chose to accept the deals knowing that they couldn't sell the AMD procs in the first place. If they had thought they could sell the AMD procs over the Intel procs don't you think they would have gone for the bigger seller in a heart beat?

So far, all I can tell about the EU is that it would suck to be the best in any single market. Regardless of it if it is a foreign or an native European company, if you are the best or top in a market they are gunning for you. They seem to under the false notion that every market should have equal competitors and that it is only illegal practices that may make one company shine over another. Reality check, all companies are not created equal. What is next? Intel can only come out with chips on AMD's pace?

The only two results of this ruling are :
A) We all pay more for our procs.
B) Some politicians get more money to play with and get to look good on the sound bites. (Not saying anything was corrupt or underhanded, just plain dumb and misguided.)




The fine should be $500 Billion per year
By Beenthere on 7/22/09, Rating: -1
By cornelius785 on 7/22/2009 1:59:28 PM , Rating: 2
lol, funny post


RE: The fine should be $500 Billion per year
By porkpie on 7/22/2009 1:59:43 PM , Rating: 5
Better yet, we should just ban all companies entirely. They're all evil, right?

Power to the people! Workers Unite! Death to our corporate overlords!


RE: The fine should be $500 Billion per year
By TSS on 7/22/2009 3:55:15 PM , Rating: 5
too bad that failed pretty hard for the sovjets.

In Soviet Russia, epic fails you.


By HaZaRd2K6 on 7/22/2009 9:48:06 PM , Rating: 2
And yet, epic is what you just won.

I applaud you, sir.

*tip of the hat*


RE: The fine should be $500 Billion per year
By rcc on 7/23/2009 11:51:34 AM , Rating: 1
Speaking of justice. You should have to pay a fine to everyone here for making us see/read your posts.

Fair is fair.


By Helbore on 7/23/2009 1:30:17 PM , Rating: 2
That wouldn't be justice for him to pay a fine.

In that circumstance it would be called compensation.


By troysavary on 8/2/2009 5:50:15 AM , Rating: 1
And where exactly do you propose they get this $500 billion if they are not allowed to sell there products?


Give up, Intel
By porkpie on 7/22/09, Rating: -1
RE: Give up, Intel
By jaericho on 7/22/2009 1:35:12 PM , Rating: 4
What is one without the other?


RE: Give up, Intel
By porkpie on 7/22/09, Rating: 0
RE: Give up, Intel
By Lifted on 7/22/2009 3:00:50 PM , Rating: 3
How did you come up with a 70% personal(?) income tax? I managed to come up with 48.4% + Social Security, and that's only on income over $372,950/year (SS only on the first 100k).

35% Federal
6.85% State
3.65% city
2.9% Medicare (self employed)

FICA gets more complicated, but it still comes nowhere close to 70% for the top bracket since SS is only for the first ~$100,000 and Medicare is 1.45%, or 2.9% if self employed.

If I add 12.4% for a self employed worker (which is more like 3% or less for the top bracket), 8.365% sales tax (who would spend all of their income on taxable items, and only in NYC?) and a 1.2% property tax, then I can manage to get to 70%, but that's using bogus numbers. This is also assuming you own your own house/condo and don't have a mortgage as that would bring the percentage down quite a bit.


RE: Give up, Intel
By porkpie on 7/22/2009 3:28:01 PM , Rating: 4
You're looking at the old rates. I'm talking about the new proposed tax increases, which will put the highest tax bracket at nearly 60% for most states:

http://online.wsj.com/article/SB124753106668435899...

That excludedes Social Security and Medicare. Add that in, and add in NYC's newly raised city tax, and you get a rate above 70%.


RE: Give up, Intel
By Lifted on 7/22/2009 6:01:46 PM , Rating: 2
I was actually referring to the current rates. You were talking about proposed rates. Thanks for clarifying.


RE: Give up, Intel
By Lifted on 7/22/09, Rating: 0
RE: Give up, Intel
By porkpie on 7/22/2009 7:06:34 PM , Rating: 2
Read again. The new 70%+ rate counts incomes taxes and social security/medicare. It does NOT count sales tax, property tax, and all the other taxes we get hit with.


RE: Give up, Intel
By Lifted on 7/22/2009 7:21:37 PM , Rating: 2
Sorry, read it again and realized it was because you lumped in Social Security which is not applicable over ~100k, and this tax rate is for earnings well over 300k. Thus it doesn't reach 70% without all the extras you just threw out, and it probably wouldn't reach 70% with those as they are variable based on so many different circumstances.


RE: Give up, Intel
By porkpie on 7/22/2009 9:28:07 PM , Rating: 2
Actually, it could be quite a bit higher than 70%, depending on your situation. If you're a small business owner, Obama's healthcare plan tacks on a whopping 8% surcharge if you fail to provide insurance for all your employees.

You're also wrong about property taxes (not that I counted them). Someone making $1M a year in NYC likely owns a apt or house worth around $10M. The tax bite on that is around $90K a year, which is another 9% alone. Don't forget the sales tax rate of 8.3% either. The total bite could hit 80% for some people. That's just sickening.

quote:
you lumped in Social Security which is not applicable over ~100k
Wrong again. Obama's new plan includes raising the cap on Social Security earnings. His original proposal was for people to pay up to $102K, then pay nothing from $102-$250K, then start paying again for everything above that.


RE: Give up, Intel
By Lifted on 7/22/2009 10:14:50 PM , Rating: 2
quote:
Someone making $1M a year in NYC likely owns a apt or house worth around $10M. The tax bite on that is around $90K a year, which is another 9% alone.


Sorry, I was actually taking you seriously there for a while.


RE: Give up, Intel
By porkpie on 7/22/2009 10:27:20 PM , Rating: 2
Sad to see someone resort to sarcasm when they can't offer a reasonable rebuttal.

Do you actually think someone making that much can't afford a residence costing 10X their annual salary?


RE: Give up, Intel
By thepalinator on 7/22/2009 11:22:51 PM , Rating: 2
I think your estimate is low if anything. A ten million dollar property in NYC city limits is going to cost more than 90 thousand a year in taxes.


RE: Give up, Intel
By chick0n on 7/22/09, Rating: -1
RE: Give up, Intel
By erikejw on 7/23/2009 10:07:02 AM , Rating: 2
"Though now I that I think about it, the US is doing pretty bad on economic justice as well. A 70% top income tax rate in NYC -- plus sales tax, property tax, and a hundred other non-income taxes? Peasants in the Middle Ages didn't get raped so hard. We've backslid terribly to get to this point. "

Hey, someone gotta pay the Iraq war.


RE: Give up, Intel
By troysavary on 8/2/2009 5:54:22 AM , Rating: 2
Iraq war? Obama has already spent or promised to spend far more money than Iraq has cost.And if his cap-and-trade legislation, or his Obamacare pass, then spending that will boggle your mind will completely bankrupt the US.


RE: Give up, Intel
By BZDTemp on 7/22/2009 2:39:19 PM , Rating: 3
Since Intel has already seen justice in the EU what they are hoping for would injustice.

It is amazing that this place again and again is full of US people voicing their opinion on the case without reading what it is about. Intel played dirty and got fined - end of story.


RE: Give up, Intel
By porkpie on 7/22/09, Rating: 0
RE: Give up, Intel
By RjBass on 7/22/2009 3:47:54 PM , Rating: 3
Looks to me like the EU started taking action 8 years ago when the investigation first started. That seems pretty soon to me, but I don't know the full story here so I could be missing something.


RE: Give up, Intel
By BZDTemp on 7/22/2009 5:50:48 PM , Rating: 3
Explain what you mean by "the EU knew...".

To me that seems like a silly concept you are coming up with as I can't see how the EU knew anything before the investigation was started. It is not like Intel reported their business practice to the EU before it started playing dirty.


RE: Give up, Intel
By CSQuake on 7/22/2009 7:02:33 PM , Rating: 2
Is it documented that they were watching Intel and waiting like you say?


RE: Give up, Intel
By porkpie on 7/22/09, Rating: 0
RE: Give up, Intel
By Danish1 on 7/22/2009 7:52:38 PM , Rating: 3
quote:
Funny then that the EU knew about Intel's marketing deals for years and never said a word. It wasn't until AMD complained (after boosting their own investment in EU manufacturing) that the EU decided to take action. If these acts were so "dirty" illegal, why didn't the EU take action sooner?


Mabe you'd like to back that claim up with some proof?
You know like sources and other insignificant stuff.


RE: Give up, Intel
By Crank the Planet on 7/24/2009 2:00:42 PM , Rating: 3
As it had been mentioned the investigation has taken 8 years. I have worked in the industry in the U.S. and have seen firsthand how Intel has used their position to strong arm companies like Dell and others to only make computers or the vast majority of their computers with Intel chips. They would either threaten to cut them off completely or they would offer very lucrative kickbacks. Intel has done this repeatedly in Europe and Asia as well for years. I've always wondered how they have gotten away with it.
They started doing this during K6 and went overboard with it when K7 came out. If they didn't do this all over the world then AMD would have crushed Intel as a company. Intel had nothing to offer back then accept "Netburst." LOL I remember them telling us how it will give us a "richer internet experience." LMAO!!!

The fine is a bit of overkill but I think it's justice. Now Intel will be forced to play nice and if they want to beat AMD so bad they will have to do it with a better product which right now they have. I can't wait for AMD to come out with a graphics core and CPU on the same die. I just hope they stay around. It looks like they company is finally turning the corner of the ATI purchase.


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