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Intel insists its innocence as it responds to antitrust allegations from the European Union

Intel revels in the glory of being the CPU industry leader, at least for the time being.  However, like many industry leaders, they have found themselves the primary target of the crosshairs of criticism.  Further, as with any company that is dominating the market, allegations of antitrust violations become a serious threat to the company worldwide. 

AMD said Intel's anti-competitive practices established a monopoly in the microprocessor market.  AMD then sued Intel in U.S. courts in June of 2005.  The company since mounted a long-standing legal battle that included ads in major newspapers and the a website chastising Intel who it portrays as sinister and monopolistic.

AMD received an ally in the form of the European Union.  In July 2007, it announced that based on evidence collected in a multi year investigation, including materials found in a June 2005 raid of European Intel offices, it was filing charges against Intel for engaging in anticompetitive practices.

Intel's senior vice president and general counsel Bruce Sewell issued a carefully worded statement soon after, firmly insisting his belief that Intel was innocent of wrongdoing in the European market.

The charges were supposed to receive a formal response from Intel by October 8, but the EU showed a bit of mercy, extending Intel's window to respond to January 4.

Last week the European Union granted Intel another small measure of leniency, allowing it to file the response to be filed on Monday January 7, instead of Friday, as dictated by the previous extension.

At last Intel issued a response to the European Union and telling the Union to "bring it on."  Intel's formal written response to the EU states not only its innocence, but also challenges EU regulators to hold a hearing to evaluate claims that it illegally used rebates to seize sales from AMD.

Despite Intel's feisty tone, Washington based antitrust lawyer David Balto, a
former U.S. Federal Trade Commission policy director, stated that Intel faces a nearly impossible challenge in proving its innocence to the EU.  He explains, "Intel is going to have a really significant challenge in the proceedings before the EU.  The EU is much more sensitive to the long-term competition effects by dominant firms and much less ready to accept simple snapshots of a company's conduct."

As per EU regulations Intel may be fined up to 10 percent of its annual sales for antitrust violations.   Microsoft initially tried to argue against the EU when it was hit with similar charges and the end result was a painful $690M USD fine.  Intel has even more to lose as it is constantly price cutting to stay competitive and has smaller profit margins, which force it to engage in yearly layoffs.

Intel is also under investigation in South Korea and Japan following raids in these nations. 


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really?
By smitty3268 on 1/8/2008 12:17:56 AM , Rating: 5
quote:
Intel has even more to lose as it is constantly price cutting to stay competitive and has smaller profit margins, which force it to engage in yearly layoffs.


How many billions of dollars did Intel make last year? I'm pretty sure they weren't "forced" to engage in layoffs. It simply made business sense.




RE: really?
By jtemplin on 1/8/2008 1:38:35 AM , Rating: 2
You actually validated or perhaps clarified his point, but you definitely aren't disagreeing with the parent.


RE: really?
By The0ne on 1/8/2008 2:58:05 AM , Rating: 2
Ah no. Due to competition from AND previous to the Core Duo CPUs Intel was losing and were laying off workers, including I believe shutting down factories or rather relocating them. I'm sure many users like myself can remember the switch from potential CPU's from AMD to Intel and back.

Intel's manufacturing process is also unique in that once the process is proven out it stays static. You don't find this in other manufacturing environments simply because many of them can't perfect the process. That doesn't mean that Intel has but it's that Intel is confident they have. There are advantages and disadvantages to this of course.

As far as free market goes, I tend to agree with some experts with the comment "What free market?"


RE: really?
By Ringold on 1/8/2008 4:49:57 PM , Rating: 2
quote:
I tend to agree with some experts with the comment "What free market?"


That's the excuse typically given to further excuse making markets incrementally even less free, but I don't see how it applies here.

I'm not personally aware that any government actively manipulates the CPU market; Intel and AMD both source parts and do assembly all around the globe. The sun probably never sets on Intel-owned facilities. Governments dont cap production, offer price supports or price ceilings to any large degree for either company (though China I thought was trying to develop their own CPU, havent heard anything on that front for years).

It would seem then that the CPU market is as free as free nearly gets, save for the taxes Intel and AMD pay. Intel's aggressive actions could be seen through a foggy pair of moral glasses and be seen as "anti-competitive", but from an economic perspective, they'd be beautiful, brutal competition.

As for any question of monopoly status for Intel, it doesn't meet any of the requirements; there are no barriers to entry, Intel does not provide a unique good that has no close substitutes, Intel cross-licenses technology with AMD and thus can't claim a patent monopoly, and Intel is not a single supplier to the market. Intel also can not set prices in the market freely; AMD's parts are close enough substitutes that should Intel raise price sufficiently, AMD would gobble up market share at a rapid clip.

AMD delivered a product that simply is inferior, at no fault of Intel's, just as Intel screwed up with the P4 at no fault of AMD's. Their market share has responded properly. Sour grapes.


RE: really?
By Oregonian2 on 1/8/2008 9:17:09 PM , Rating: 2
quote:
AMD delivered a product that simply is inferior, at no fault of Intel's, just as Intel screwed up with the P4 at no fault of AMD's. Their market share has responded properly. Sour grapes.


The EU could easily argue against that statement. AMD's parts are inferior directly due to Intel's actions of designing and building better ones. Clearly, and I think can't be argued against.

Now, my previous statement above is also clearly stupid and idiotic, IMO, but it's still a true statement and lawyers can interpret things however they want if the courts decide to agree with it.


RE: really?
By Ringold on 1/9/2008 11:07:31 AM , Rating: 2
quote:
lawyers can interpret things however they want if the courts decide to agree with it.


And so can politicians, and thus here we are.


RE: really?
By lompocus on 1/10/2008 9:26:45 AM , Rating: 1
it's europe. Who cares? Intel can sell them 2million dollar desktop procs for all I care.


RE: really?
By OrSin on 1/16/2008 11:29:17 AM , Rating: 3
The problem with Intel is thier business practice. For long time they offer rebates basiced on not buying other produces. If they offered volume discounts thats fine. But to offer a discount not to get someone else product and you are the market leader then that is wrong. They have already been caught in Japan doing it, and Dell records show they was being paid over 1 billion a year not to use AMD. Thats way dell stockholder was sueing them. DEll never said they got the intel money. So people bought stocks assuming the company was profitable when they was really just making their money in kickbacks.


fines
By drank12quartsstrohsbeer on 1/7/08, Rating: 0
RE: fines
By misuspita on 1/8/2008 5:20:15 AM , Rating: 2
And how did you came to that conclusion?

If everything checks out, and Intel is proven guilty, than it seems we all who bought a Intel CPU back in the day got screwed and paid more than it deserved. The fine you say was kinda been paid by us already because of the high prices. I don't see how do we end up paying the fine...


RE: fines
By Spivonious on 1/8/2008 9:11:18 AM , Rating: 2
Who pays for the EU's lawyers? The taxpayers.


RE: fines
By misuspita on 1/8/2008 9:55:28 AM , Rating: 4
And if they find Intel guilty and fine them to hell, then they would have paid themself (the lawyers)


RE: fines
By masher2 (blog) on 1/8/2008 10:57:40 AM , Rating: 2
Antitrust laws, particularly in the EU, are written in a vague manner and open to a vast degree of interpretation. A cynic would say they're intentionally written so.

In any case, if the EU wants to find Intel (or any other industry-leader) guilty, they'll do so.


RE: fines
By Captain Orgazmo on 1/8/2008 9:48:05 PM , Rating: 1
The EU parliamentary and legal branches are dominated by Marxist ignoramuses. They are accusing Intel of anti-competitive behavior by charging too much. If anything, that is pro-competitive because it is price undercutting that hurts competitors. If Intel had instead done what government corporations (like the subsidized companies of Europe and Canada) do, and had killed its competition off, then maybe the EU would be happy?!


RE: fines
By ImSpartacus on 1/10/2008 4:30:30 PM , Rating: 2
quote:
If anything, that is pro-competitive because it is price undercutting that hurts competitors.


Prices cuts are not 'pro-competitive'. They're just the opposite. A trust (monopolizing company) uses its bank account to cut prices down so that their competition goes out of business.

quote:
If Intel had instead done what government corporations (like the subsidized companies of Europe and Canada) do, and had killed its competition off, then maybe the EU would be happy?!


Intel is currently killing off its competition...


RE: fines
By Captain Orgazmo on 1/12/2008 7:49:18 PM , Rating: 2
You need to read a little more carefully. The first point you made just reiterated my point. I said "it is price undercutting that hurts competitors". Intel has been accused of price fixing, which is impossible because they are not a monopoly, so any overcharging on their part can only help the competition. The only reason Intel is gaining market share is because they offer a better product than their only real competitor, AMD.


bring it on
By Screwballl on 1/8/08, Rating: 0
RE: bring it on
By excrucio on 1/8/2008 7:27:32 PM , Rating: 2
IBM is mostly super computers.
VIA is usually motherboards.

AMD and INTEL are the giants in the CPU, as in mainstream, PC's


RE: bring it on
By Oregonian2 on 1/8/2008 9:24:48 PM , Rating: 2
I think I read that IBM's intention is to get out of the hardware business (at least as a focus) and into the services business. Get help from the "I-man".

VIA who used to be big in motherboard chipsets I think got out of that business, didn't they? Theirs were the crummiest in my experience. I think Nvidia and Intel are the biggies in processor chipsets now, with AMD third I think.

AMD and Intel I've always used though (although had a NEC version of the 8088 way back when). Mostly AMD though (until current Conroe processor). So I agree on that one.


RE: bring it on
By Oregonian2 on 1/8/2008 9:35:59 PM , Rating: 2
P.S. - The processor that's the most dominant in terms of numbers is probably the ARM or MIPS, or some such like that. Every cell phone, every iPod, every TV, every whatever other consumer product with a processor internally that's not an x86 processor... etc.


RE: bring it on
By ceefka on 1/16/2008 2:46:59 PM , Rating: 2
Make that 5: Sun, I'd say they're bigger than VIA.


Intel's Attitude
By joseph1110 on 1/8/2008 2:23:29 PM , Rating: 2
And, Intel just recently pulled out of the Board of OLPC,
headed by Nicholas Negroponte, after STILL trying to compete
with / undermine OLPC, I read in TNYT & TWSJ!
Well, now, what a pleasant, corporate Attitude Intel has, I
guess!




RE: Intel's Attitude
By Ringold on 1/8/2008 4:10:01 PM , Rating: 2
I read elsewhere that Intel in fact discontinued the development of its competing laptop.

Instead of racking it up to "corporate attitude", I can't help but wonder if Intel just finally realized what a hack Negroponte is and what a waste the project has become.


RE: Intel's Attitude
By 16nm on 1/8/2008 8:16:42 PM , Rating: 2
Anyone who sees these children and comes to the conclusion that they are most in need of a portable computer IS a hack. Negroponte is a DUMBA$$. If he wants to help the children of Brazil, Cambodia, etc. then he should focus his efforts on ensuring they all are fed, clothed and in good health. A computer is absolutely NOT important to the development of a child. Imagine the number of books that could be bought if for each child $100 dollars was donated. A school with just 100 students could buy $10,000 worth of books!!!


RE: Intel's Attitude
By nofranchise on 1/10/2008 10:15:40 AM , Rating: 2
And people who write "DUMBA$$" in their posts are of course more enlightened and a better source of truth than an MIT professor...


Wrong Impression?
By InternetGeek on 1/8/2008 12:03:37 AM , Rating: 2
quote:
Intel has even more to lose as it is constantly price cutting to stay competitive and has smaller profit margins, which force it to engage in yearly layoffs.


I thought it was AMD the one who had to sacrifice the lion's cut of earnings in order to compete these days?

Also, I thought the layoffs in Intel were because of their refocusing their operations/approach (back to basics).




RE: Wrong Impression?
By The0ne on 1/8/2008 3:01:07 AM , Rating: 2
AMD is cutting back due to Intel's Core Duo options and maybe the loss from the ATI video market side. Intel is more or less restructuring as they are taking risks in other areas and leaving some behind. Not much of the CPU market activities is affecting their decisions for the risks, imo.


I have to say...
By Crystalysis on 1/10/2008 10:16:45 AM , Rating: 2
I absolutely love the article images. Sometimes, it's the only thing that makes me smile on a particular day. :)




Stupid people
By KnickKnack on 1/11/2008 3:45:58 AM , Rating: 2
Instead of screaming xenophobic mantras about apparently corrupt European rulings, why don't you do some of your own investigative journalism and read about what is actually going on?

Some of the allegations are that Intel supposedly punished firms that sold rival AMD products by charging them more or refusing them stock allocation. Even New York's Attorney General Andrew Cuomo is investigating Intel over the same anti-trust laws so it's not just the EU.

I expect this kind of childish naivety from the 15yr old idiots on this board but some of you don't have youth as an adequate excuse




(sigh) EU
By TALENT on 1/8/2008 6:48:28 PM , Rating: 1
All products from Microsoft and Intel should be rebranded and sold through another company. Maybe if the products had a different stamp on them EU wouldn't be looking for handouts from MS or Intel.

Why does EU expect profitable companies to pay their check??




Backwards
By pauldovi on 1/8/08, Rating: -1
RE: Backwards
By smitty3268 on 1/8/2008 1:53:55 AM , Rating: 2
quote:
If you punished Intel for being a better company with a better product prices go up. If you fine Intel or subsidize AMD, prices go up.

In the short term, yes. The question is, what happens in the long run - if the competition between the 2 companies is about to end, then the short term loss for consumers results in a long term gain. But if there is no danger of the competition between them dying out, then there's no reason to do this.

quote:
There is no such thing as a monopoly in a free market.

LOL


RE: Backwards
By Christopher1 on 1/8/2008 2:46:04 AM , Rating: 1
Actually, he is half right. There is no such thing as a monopoly in a truly free market, but the problem is that the world economy has been no such thing for an extremely long time.

In a true free economy, the person spending the dollar chooses.... but when government limit choice with taxes, tariffs and other things..... that is when the 'free economy' fails to be free anymore and there is little choice.

Add to that government failing to monitor companies to make sure that they are not engaging in monopolistic practices (threatening to not sell to people unless they buy from them solely, etc.)..... and there is no free economy.


RE: Backwards
By smitty3268 on 1/8/2008 3:21:37 AM , Rating: 4
He's right in the sense that once a monopoly exists, there is no more free market. But a monopoly can be created in a truly free market, even if it isn't easy. You really just need to have a high barrier to entry. In some cases, this is a physical barrier - you don't want to have 50 different companies all with their own electrical system hooked up to your house. Other times, it's merely financial/intellectual - it takes a great deal of money and research in order to create something as complex as a cpu. That's a very different situation from something like selling fruit, which anyone can do.


RE: Backwards
By noirsoft on 1/8/2008 3:36:45 AM , Rating: 5
quote:
monopolistic practices (threatening to not sell to people unless they buy from them solely, etc.).....


You mean the way Apple forces you to buy their software if you buy their hardware, and the complete lack of support for running their software on other people's hardware?


RE: Backwards
By Xavian on 1/8/2008 4:34:06 AM , Rating: 2
But, you can choose to go Apple or someone else if you don't like what they do, i don't think you know what a Monopoly means.

Microsoft however have a few monopolies, you have to play most PC games on Windows, You have to play wma files with Windows Media Player, you have to use office files with the Microsoft Office Suite.

Usually this wouldn't be a problem, but there is no alternative to these products in most cases and that's what a monopoly is.


RE: Backwards
By Fox5 on 1/8/2008 5:16:50 AM , Rating: 2
Being a monopoly alone isn't a problem.
Sure, microsoft has the monopoly on WMA files, but WMA is hardly the only choice (or even the best) for music.

I thought Microsoft's monopoly problems were more relate to bundling and varying pricing and availability to discourage PC makers from using competitors (even among windows software).

Anyhow, as AMD is a somewhat major European corporation, it'd be interesting if some element of protectionism plays into the Intel monopoly case. Germany's bailed AMD out before, maybe the EU may try the same. At the very least, keeping a viable competitor in the cpu market may be seen as serving the EU's long term interests.


RE: Backwards
By Zandros on 1/8/2008 12:25:25 PM , Rating: 2
AMD is no more European than Intel is Malaysian.

Anyway, what happened to the presumption of innocence? I find it absurd Intel having to prove they are innocent.


RE: Backwards
By pauldovi on 1/8/2008 12:48:47 PM , Rating: 3
We are talking about Europe. You are presumed to be guilty. You get your rights from your government....

"The New Europe, reminding you why your ancestors left the old one."


RE: Backwards
By Oregonian2 on 1/8/2008 9:29:35 PM , Rating: 2
Not quite true I think. AMD has 100% of it's high-end processor fab in Germany I think. If they lost that fab due to an earthquake they'd be dead meat. If Intel lost a fab in Malaysia it would not be good, but they'd not be dead meat, they'd just have a sore elbow.

P.S. - Yes, AMD has now multiple fabs in Germany, but I think they're next to one another.


RE: Backwards
By nofranchise on 1/10/2008 10:20:51 AM , Rating: 2
Who said Intel are innocent? If you've seen the evidence discovered by the EU's lawyers, please let us in on it. But to think the European Union would go to court in a case like this withouth hard evidence is a tad more absurd.


RE: Backwards
By Oregonian2 on 1/8/2008 9:31:19 PM , Rating: 2
Good point. McDonald's has a monopoly on "Big Macs", but that doesn't seem to cause a problem. Burger King has a monopoly on "Whoppers" which compete with the other monopoly. :-)


RE: Backwards
By rdeegvainl on 1/8/2008 5:18:50 AM , Rating: 2
So you have to use windows media player, to play windows media? also there are alternatives to the products windows have. They may not be what you want or need but they are there. You have linux, you have open office. Oddly enough, the ones I mentioned are FREE.


RE: Backwards
By Lonyo on 1/8/2008 8:30:12 AM , Rating: 2
Xavian does seem to have no idea what he is saying.
Not only (in hardware terms) is there a wide range of support for wma files in portable players (Creative, Cowon, Philips, Microsoft, iRiver etc etc), but in terms of software on a computer for playing, there are many many many available options (Winamp, Foobar etc etc).
So not only does wma work in different software players, it also works on different hardware, unlike Apple iTunes tracks. Although I am not sure how the new Zune marketplace tracks work.

As for office files, as mentioned, OpenOffice (AFAIK) works with MS Office files, and it's free, and available for Windows and Linux.


RE: Backwards
By Joz on 1/8/2008 6:24:34 PM , Rating: 2
This post made me laugh.

First off, Microsoft no longer creates its own monopoly, it no longer has too, all the programs bring written are written for the majority OS (aka: Windows) if you want to get pissed off at someone for creating a monopoly, well, go yell at anyone who uses Windows.

Secondly, I do belive OpenOffice can handle any Microsoft Office file. And WMA can be played on other programs with a few minutes of googling codec packs.

THERE ARE MANY ALTERNATIVES, you just to much of a moron to find them, and I hope when you do, that your to stupid to use them.


RE: Backwards
By Ringold on 1/8/2008 6:37:19 PM , Rating: 3
quote:
THERE ARE MANY ALTERNATIVES, you just to much of a moron to find them, and I hope when you do, that your to stupid to use them.


Alternatives for the infirm of mind? Doesn't Apple corner that market? :)

(I kid! Sort of..)


RE: Backwards
By BMFPitt on 1/8/2008 10:57:17 AM , Rating: 2
Apple is a monopoly like Dennis Kusinich is a Presidential frontrunner.


RE: Backwards
By ghost101 on 1/8/2008 1:13:19 PM , Rating: 3
Itunes/ipod statistics would disagree.


RE: Backwards
By BMFPitt on 1/8/2008 3:08:24 PM , Rating: 2
There are dozens of available alternatives that are in many cases cheaper and/or better. Only a small fraction of songs stored on iPods are iTunes purchases. There is nothing at all that compels a music player buyer to pick an iPod (unlike, say, Comcast.)


RE: Backwards
By qwertyz on 1/8/08, Rating: -1
RE: Backwards
By nofranchise on 1/10/2008 10:23:19 AM , Rating: 2
LOL - You really have no idea about the world you live in do you?


RE: Backwards
By pauldovi on 1/8/2008 11:26:27 AM , Rating: 2
You cannot create artificial competition. If AMD cannot compete, the answer is not subsidies by the EU. That is artificial competition and results in higher prices and poor products.

Your mind has been twisted so much by your acceptance of the government control over your life. Stop gulping Kool-Aid and wake up. True free markets have no monopolies.


RE: Backwards
By JakLee on 1/8/2008 1:00:46 PM , Rating: 2
However if a company engage in monopolistic practices to the detriment of their competitor, then it is appropriate for them to "pay" for it so to speak. If it is true that Intel didn't play by the rules & caused AMD to be in the situation they are now by unfairly restricting AMD's ability make money; then we the consumer lose out on a potential better processor.

What would the field look like now if AMD had made 3 billion more on processors 3 years ago?

I don't know if intel has done anything wrong, and even if they had I don't know if that has had much if any real impact on amd's development...... but its hard not to speculate "what if's" if this is true.....


RE: Backwards
By ghost101 on 1/8/2008 1:03:36 PM , Rating: 2
The question is, if Intel did indeed practise anti competitive practices in order to maxmise sales and minimise AMDs sales in the period in question. Is the current situation where Intel have produced better products a big surprise? One could argue that AMD wouldnt be in the financial turmoil they are now if they had the sales they could have supposedly had. of course, we cant tell. But what we do know is that it isnt healthy for consumers in the long term.


RE: Backwards
By ghost101 on 1/8/2008 1:11:41 PM , Rating: 2
True free markets have no monopolies under assumptions that rarely hold.

This isnt about creating artificial competition, this is about promoting competition through punishing anti-competitive behaviour.


RE: Backwards
By Ringold on 1/8/2008 4:26:45 PM , Rating: 2
No, it's about funding the European Union.

If the EU were interested in investigating criminal activity by Intel, fines would not be on the table; jail time would be.

If the EU were interested in protecting the interests of EU residents (almost said citizens -- that's coming soon enough), then fines would not be on the table there either. They'd locate and identify any ongoing practices they think are done to the detriment of "competition", order Intel to stop, and if Intel did not, then the criminal charges against individuals again.

Fines hurt Intel, and a hurt Intel can't help but pass that on to the end consumers in the form of higher prices if the market will allow them to raise prices or, in the longer term, a delayed expansion of production or delayed new technology from the loss of money that otherwise would've remained in their coffers for investment.

Punishing Intel serves no economic purpose going forward; there are a few possible sources of this desire I can think of off hand-
a) The human need for revenge
b) Typical ignorance of the concept of sunk cost
c) Politicians desiring to exercise their power
d) A desire to fund the European Union by milking an "evil" corporation

Assuming these politicians don't feel personally offended by Intel, and that they really are semi-educated and know full well what they're doing, then c and d seem to be the answer.


RE: Backwards
By ghost101 on 1/9/2008 10:51:10 AM , Rating: 2
When was the last time the FTC jailed someone for an anti-trust violation? What you're debating about is whether something like this should have criminal or civil penalties. You could argue either way.

As for big evil corporations, the most of the cases the eu competition commission. It took the eu commission to get rid of the Bermuda II agreement, which created a legal cartel amogst 2 countries which view cartels as illegal.

Simply going on the website

http://ec.europa.eu/comm/competition/index_en.html

you can see it does not discrimaate against US companies as such. Obviously there are political influences over certain cases just as there are in the USA. Boeing vs Airbus for example.


RE: Backwards
By ghost101 on 1/9/2008 10:53:09 AM , Rating: 2
*most of the cases the eu competition commission looks at are entirely within the EU.


RE: Backwards
By Ringold on 1/9/2008 11:18:56 AM , Rating: 2
quote:
When was the last time the FTC jailed someone for an anti-trust violation?


I was suggesting what would be a better alternative than damaging the market for damage done previously. It's entirely illogical. Your idea of civil penalties, against individuals, is better then my criminal jail time idea, I just didn't think of it.

quote:
you can see it does not discrimaate against US companies as such.


Is it just me or does a European government website that says "Competition: making markets work better" make one hurt with laughter? Hmm.. might just be me.

At any rate, they note there on their own website they haven't come close yet to properly liberalizing their utilities sector, for example. Assuming they don't have unlimited resources, I would imagine they'd generate significantly larger gains for the European Union members economies by focusing their energy there.. However, that wouldn't generate much revenue for the EU though, would it? It would also ruffle many political feathers along the way. Easier, then, for everybody to try to pick on Intel, Apple, Mr. Softie, and whatever other cash-rich multinational they can find with little local political support. I'm glad Intel is willing to fight back.


RE: Backwards
By ghost101 on 1/9/2008 11:17:11 AM , Rating: 2
As for whether fines are justified. If indeed it is passed onto consumers then it would help AMD compete. Small justice for AMD if Intel did engage in these practices.

We dont know what the burden Intel will have from this possible fine and what the burden on consumers will be. But it will reduce intel's profits. Therefore, they will always have an incentive to stop doing whatever the commission has an issue with. They may also consider lost profits because of the increase in competition. It seems Intel have stopped such practices but the fine serves as a reminder that it wont be accepted.

You also seem to be saying that it reduces investment and hurts consumers in the long run. Now you are debating whether profits through monopoly pricing is a bad thing. I think you are mistaken to think that shareholders would want investment in expanding beyond the profit maximising level of output when they can simply control sales in the market (ensurung profits) as they supposedly did in AMDs complaint.


RE: Backwards
By Ringold on 1/9/2008 11:34:09 AM , Rating: 2
quote:
think you are mistaken to think that shareholders would want investment in expanding beyond the profit maximising level of output when they can simply control sales in the market (ensurung profits) as they supposedly did in AMDs complaint.


That is not quite my argument. I don't know that Intel, or anybody, sits down in a board meeting and actively cuts back investment across the board if they're advancing too rapidly -- though Intel in fact may reach that point eventually in order to avoid annihilating AMD. At any rate, if a sufficiently large pile of cash evaporates, then Intel would simply not have that cash available to make as many investments across any time frame moving forward, short term or long term. Just like interest on a bond or interest on debt, that opportunity cost of taking a pound of flesh out of Intel simply grows the further out in the future one looks. From a shareholder perspective, even if Intel planned zero further R&D or cap-ex, they'd much rather have a share buy-back program or dividend then to fund the expansion of a pan-European superstate.

Of course, I am talking about substantial amounts, as in hundreds of millions. I doubt anything less would even move the stock. Not that it needs help falling lately...

Also, defending Intel now does not necessarily mean I'm pro-monopoly, I simply view it as appropriate to consider the past actions and resulting damage as sunk cost. Instead of being punitive, whatever needs to be done should be, IMHO, should be done to stop future anti-competitive behavior. They did not take the money they stole from Microsoft and donate it to Apple or Linux development projects, so the precedent of taking from Intel and giving to AMD isn't there. Plus, it also edges toward some fuzzy idea of income redistribution for the "less able" corporations -- pardon while I run away from the mere idea screaming.


RE: Backwards
By nofranchise on 1/10/2008 10:27:44 AM , Rating: 2
LOL again. You truly believe the EU uses a lawsuit like this to fund itself? You clearly have no idea what the EU is.

Punishing Intel has no purpose? What about justice and uphoolding the law?

I guess you and the other chumps from the milita just string people up when they steal out in the open. Corporate crime? I ain't never heard of it?


RE: Backwards
By eye smite on 1/8/2008 5:59:42 PM , Rating: 2
Well lets keep it simple. Allegations were made that intel told certain manufacturers of computers that they would not get discounted cpu's from intel unless they exclusively sold intel's in their systems. I don't know if that's true or not, if memory serves this and other claims were made against intel end of 2k5 first of 2k6. But then in 2k7, all of a sudden Dell and Toshiba started selling amd's in their systems, and omg at Walmart to boot. Is that just coincidence or am I grasping here?


RE: Backwards
By Ringold on 1/8/2008 6:42:49 PM , Rating: 1
I went to a resteraunt last night, asked for a Diet Coke. All they had was Diet Pepsi.

Monopoly?

Also note how certain events and some retailers are exclusive to one credit card provider or another.

Intel in my mind would just be copying other industries ideas.

As far as Dell offering AMD chips goes, my understand was that those who did offer AMD chips still didn't see them fly off the shelves when AMD had the performance advantage. Dell not selling them might look bad but I don't know how much material damage it really constituted. A consumer who desired a computer with an AMD processor could easily browse to another website that did offer them.


RE: Backwards
By eye smite on 1/8/2008 6:50:59 PM , Rating: 3
Well what I'm saying is the allegations wouldn't play anything in my mind but accusations with little or no proof to be shown. However, with Dell and Toshiba suddenly offering amd cpu's at a time when intel was clearly on top with core 2 makes me question why. I don't see this as just a coincidence of timing, to me this gives that much more weight to the accusations against intel of strong arming exclusivity at certain system manufacturers.


RE: Backwards
By Ringold on 1/8/2008 7:13:03 PM , Rating: 2
You may be right. Thankfully, Intel slammed the ball back in their court and are daring them to shoot back.

If nothing else, this might prove to be high entertainment!


RE: Backwards
By eye smite on 1/8/2008 7:17:19 PM , Rating: 3
Yeah I don't think intel had much choice. If they wanted to be a clear winner again, they had to come out with something comletely different, cause the P4 wasn't taking them anywhere fast.


RE: Backwards
By ghost101 on 1/9/2008 11:34:54 AM , Rating: 2
It depends on the market share of each company. But if Pepsi did this at any large scale, yes Coca-cola can lodge a complaint for it to be investigated.

As for the credit card exclusivity, if events/retailers are paid off for exclusivity and the credit card company in question has significant market power again if any firm lodges a complaint with some evidence it will be investigated.


RE: Backwards
By eye smite on 1/9/2008 3:50:03 PM , Rating: 3
I don't think either one of us were looking for commentary on soda's or credit cards. He was using them as an example and they aren't a comparitive situation to the intel accusations seeing as we're talking about amd and intel, 2 companies. CC and soda companies are numerous and won't be accused of strong arm tactics for exclusitiy like intel has been. So.........we're talking apples, the oranges need to be left out or commented on in the xbox section.


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