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Intel CEO Paul Otellini arrives at the EC hearing building in Brussels to argue Intel's case.   (Source: REUTERS/Francois Lenoir)
Chipmaker continues to plead its innocence before the EU

The European Commission (EC), the executive arm of the European Union (EU), has already brought one mighty opponent to its knees.  It fined Microsoft almost $2.6B USD overall for antitrust violations, including fines of $690M USD and $1.4B USD.  Microsoft tried to refuse to comply with EC's verdict, but ended up paying for it even more in the end.

Now the EU is pursuing chipmaker Intel for allegedly employing anticompetitive practices such as a price slashing and illegal rebates to drive smaller chipmakers out of business.  The EU issued formal charges against Intel in July.  Intel responded quickly that the charges were nonsense and that AMD was the one complaining, not the customers.  AMD claimed that Intel reaped $60B USD in monopoly profits.

Intel fought back demanding a hearing before the EC where it could argue its viewpoint.  Meanwhile, Intel suffered another loss when its German offices were raided last month by EU agents, who seized documents applicable in the antitrust case.  Germany was one of the countries in which Intel is allegedly to have employed price manipulation and illegal rebates.

Now Intel has finally gotten its way, in effect, as it had a chance to plead its case before an EC hearing.  Intel's chief executive Paul Otellini travelled to Brussels to represent his company at the hearing.  Intel, whose chips are in four out of every five of the world's servers and PCs, has also been accused by the EC of paying off computer manufacturers to pick Intel chips over AMD chips.  Intel has denied these claims saying it competes fiercely and legally.

Mr. Otellini addressed Hearing Officer Karen Williams, arguing that Intel's financial practices were well within the law and that its success was from having a better product, not illegal maneuvers.  Ms. Williams will report to Competition Commissioner Neelie Kroes on the case at the end of the hearing. 

Commissioner Kroes, who recently championed the $1.4B USD fine against Microsoft, will make a final suggestion to the full European Commission about Intel's fate and the amount of a possible fine.  Fines can be up to 10% of a company's global revenue, under EU business law.  Commissioner Kroes previously stated that Intel may be a larger threat to E.U. business then Microsoft.  Following Commissioner Kroes statement, the EC will put the issue to a vote and come to a judgment.

Intel had most of the day yesterday to plead its case.   It discussed proprietary information during the hearing, requiring several participants to have to leave for extended periods.  The U.S. Federal Trade Commission and New York attorney general's office, who are investigating possible Intel antitrust violations within the U.S, were both represented.  It is expected that they may launch similar antitrust campaigns following in the EU's footsteps.

Today several consumer groups will have their chance to speak.  BEUC, a European umbrella group for consumer groups, and individual groups from the Netherlands, Spain and France will all be represented.  The groups so far have not come out with a firm stance on the allegations, but Monique Goyens, BEUC director general assured, "We may do so later."

She further stated that BEUC wants to ensure that consumer issues about pricing and innovation are properly examined and addressed.  AMD and Hewlett Packard are also both going to speak today.  Their accounts and testimony will be critical as their relationships with Intel figures heavily with the charges leveled against the chipmaker.

The EU, in addition to the Intel office raids, raided multiple retailers that sold only Intel chips and not AMD chips.  The materials gathered in these raids cannot be used in the hearing.  However the EC could elect to issue new charges against Intel at any point.  It did so three times during the Microsoft case, so such a result is not unexpected.

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RE: More European = Communist Comments
By pauluskc on 3/12/2008 11:46:06 AM , Rating: -1
so where does the billions in fines go then?

RE: More European = Communist Comments
By Proteusza on 3/12/08, Rating: 0
By FITCamaro on 3/12/2008 12:02:19 PM , Rating: 3
A high GDP does not indicate that you have plenty of money to spend. I think the US debt proves that.

RE: More European = Communist Comments
By pauluskc on 3/12/2008 12:23:56 PM , Rating: 3
Aha! Commies fine companies! The thought never occurred to me!

They fined Microsoft for their own gain? aha! My non-thought as well.

I was just curious where the damn money went people. Easy on the commie-crap, that's a different thread in this discussion. One facet at a time.

And where does the GDP have anything to do with anything? the EC doesn't have that kind of GDP.. maybe the EU. If they take these fines and do like one poster here suggested and upgraded entire educational systems in a third-world country (or even their own Union) that'd be nice.

Please stick to my original question.

RE: More European = Communist Comments
By Proteusza on 3/12/08, Rating: 0
RE: More European = Communist Comments
By pauluskc on 3/12/08, Rating: 0
By Proteusza on 3/12/2008 12:33:04 PM , Rating: 2
I'm not going to bother, read the post by nofranchise below.

RE: More European = Communist Comments
By nofranchise on 3/12/2008 11:51:57 AM , Rating: 3
So... I don't get it. You think it is unfair that the EU fines a criminal? So they should let them go with a warning or what?

Oh i get it - it's the well known "The EU needs the money" argument again. Right.

The billions in fines pay for a legal system that does actually prosecute and convict corporations if they break the law.

RE: More European = Communist Comments
By pauluskc on 3/12/08, Rating: 0
RE: More European = Communist Comments
By nofranchise on 3/12/2008 12:06:40 PM , Rating: 3
You people crack me up again and again.

"Show me the money!" - The money is being spent the same way tax is being spent. On government - or in this case - Union expenses...

You actually believe the fines "grease" a select number of people??? Yeah - that's believable - wouldn't it be easier to ACCEPT bribes from Intel in the shadows than host an open trial with huge press???

Oh I forgot, the EU WANTED bribes but the cute and cuddly Intel from butterscotch mountain wouldn't do it, so now the eeeevil EU has to steal it away! Stand and deliver!

By hathost on 3/14/2008 4:42:40 PM , Rating: 2
Except that there is no such thing as government having enough money. If the government taxed everyone 100% they still wouldn't have enough it the nature of gov't.

RE: More European = Communist Comments
By crystal clear on 3/12/2008 12:03:51 PM , Rating: 1
To pay for those inflated salaries+perks+golden parachutes.....for those E.U commisioners & staff.

Good life...flying first class,$1000+ hotel suites
expensive dinnings etc.


RE: More European = Communist Comments
By Proteusza on 3/12/2008 12:07:09 PM , Rating: 1
Another ignorant American.

Hey, its not like any American politicians are corrupt. I mean, its not like John McCain found out about that Boeing Scandal in 2002. Its not like WaterGate ever happened.

Try to post concrete examples instead of just FUD, better way to argue.

RE: More European = Communist Comments
By crystal clear on 3/12/2008 12:32:37 PM , Rating: 4
Yes stay a few months in Brussels to see for yourself what I write.

I drop in frequently there ...

There is no business like the fine business...

RE: More European = Communist Comments
By Proteusza on 3/12/2008 12:37:14 PM , Rating: 5
meh, not crazy about Brussels myself.

But I do think its ironic to characterize the EU has bloated and corrupt, when Washington is hardly the opposite.

Yes, the EU is most likely rife with corruption, but lets not forget that just about all countries are, and the US, if its not the most corrupt, is up there with the most corrupt.

By pauluskc on 3/12/2008 12:44:34 PM , Rating: 2
Hypocritical is a better word than ironic, especially if I believed that Washington wasn't corrupt. Which everyone knows isn't the case.

Unless you mean it's ironic because they punish a company for being bloated and corrupt, when they themselves are bloated and corrupt. Wait, no, that's hyprocracy again.

RE: More European = Communist Comments
By Parhel on 3/12/2008 1:26:47 PM , Rating: 4
It's naive to suggest that the US is among the most corrupt of countries. Travel the world a bit, and you'll see what political corruption really means.

By Proteusza on 3/12/2008 1:41:27 PM , Rating: 3
Well, I grew up in South Africa, so I have a fair idea of what corruption is.

The US may not be among the most corrupt countries, but according to your source, Western Europe (an important part of the US) is on average less corrupt than the USA.

By weskurtz0081 on 3/12/2008 12:51:34 PM , Rating: 3
Hmmm.... I think there might be a better way of getting people to listen to you rather than just calling them ignorant. If I just started calling you ignorant because you didn't agree with me, I doubt you would be very willing to listen to what I had to say.

RE: More European = Communist Comments
By Ananke on 3/12/2008 1:00:26 PM , Rating: 3
Billions of fines go to the EU budget. How money of that budget are distributed thereafter is EU business, not American. Have you heard if somebody outside USA demanded how the President Bush must spend American budget?
The focus is the investigation of illegal business practices, which may or may not exist or existed. If Intel is right, OK, they will not be fined. And they will not pay the EU legal expenses on the case either.
In this case it is in EU interest to scrutinize business practices, since non-european company have natural monopoly in socially and defensive sensitive field such as the microprocessor development and manufacturing. I have the feeling similar and so serious case hasn't happened in USA because of the strong lobby connection domestic corporation have with our "honest and trustfull" government.
EU is very careful about evolution of companies into natural monopolies, and as far as it is possible it tries to support fragmented and competitive free market, what the purpose of government is in free market economy. Please, don't blame the people that they are trying to have better democracy and fair economy.
As far as where the fines go - would you justify the fines better if you know that money from EU budget go to the public healthcare too? Isn't that a nobel enough purpose? Or it would be better spent in prolonging Iraq war, so several thousand more soldiers have greater chance to die there. And several corporations would better chance to make more billions also. Which way is better - American or European?

By pauluskc on 3/12/2008 1:15:04 PM , Rating: 2

Go Rasta!

By prenox on 3/12/2008 1:41:07 PM , Rating: 2
If they do find Intel did wrong I don't see this money going to help AMD or any other company that Intel may have hurt.

By xdrol on 3/13/2008 11:08:09 AM , Rating: 2
Same place your (ehm, my) tax money goes.. Education, infrastrucute, research, etc. (yeah, ofc. military and such as well)

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