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Investigators crack down on illegal tactics against AMD

South Korean antitrust investigators fined Intel Corp. 26 billion won ($25 million), for illegal rebates and parts discounts to manufacturers on condition that they not buy from rival manufacturer AMD.

The fine, which closely mirrors the outcome of a similar antitrust investigation in Japan in 2005, makes Intel the second major global technology company to be disciplined by South Korea’s Fair Trade Commission, after Microsoft in December 2005.

Intel said it was displeased with the outcome of the order, and is considering appeal.

“We're disappointed and we completely disagree with the findings,” said Intel’s senior VP and general counsel Bruce Sewell.

South Korean officials hit Intel with antitrust charges last year, working from findings of a two-year investigation wrapped up last September.

Forbes called the rebates a “time-honored practice in the personal computer industry;” identical practices in Europe, the United States, and Japan have since landed the company in considerable hot water. Both European and American investigations are still pending.

In Europe, rumors of a “provisional decision” at the end of last month proved to be false, after European Commission officials dismissed a report that it had gathered sufficient evidence to enter a ruling. Despite that, the Commission promised an antitrust ruling against Intel “as soon as possible,” but refused to provide a specific timeline.

If antitrust rulings against Microsoft are any indication, Korea’s ruling against Intel will be a pittance against the kind of money that European investigators might fine. Antitrust investigations against Microsoft hit the company with a whopping $1.4 billion fine last February – compared to $32 million in South Korea – and EU antitrust rules allow for fines of up to 10 percent of annual sales.

Intel will wait for the dust to settle before it acts, it said, as the official outcome could take between 30 and 60 days and may change significantly during that time. The company can also opt to request reconsideration from the KFTC, or choose to seek a court ruling.

Regardless, Intel denied any wrongdoing with respect to its rebate practices.

“To ask us to cease and desist behavior which we are not doing and never have done is odd,” said Intel representative Nick Jacobs. “We don't use rebates in an anticompetitive fashion.”

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RE: Rebates are perfectly acceptable
By Crank the Planet on 6/5/2008 7:41:18 PM , Rating: 2
Intel has been practicing these strong arm tactics for several years now. Ever wonder how they managed to stay afloat after AMD's K8 just dominated everywhere? It's right here baby! Intel has used these tactics world wide to keep people from buying AMD. Yes you heard me right. It is illegal for a company to offer any type of incentive not to buy a competitor's product. Intel didn't have a good product so they did this and worse so that companies wouldn't sell AMD. It is well documented that companies like Dell were "told" not to sell AMD, and if they did they just might be skipped on future shipments of CPU's, motherboards etc. That would effectively cut the throat of any PC retailer and drive them out of business literally overnight. On the other hand if they played ball nicely with Intel they would be offered "incentives" and "rebates."
I don't care if some or all of intel's product line is faster, I will never buy from them and will continue to discourage everyone I can from buying their products because of their severe lack of moral fiber. If you can't stay competitive or keep innovating for your customers then you are in the wrong business.

You give AMD some time. It might be 2 years, it might be 5. When Fusion comes out and it's iterations intel will tremble you just wait and see. Then all of their deep pockets and strong arm tactics wont be able to save them.

RE: Rebates are perfectly acceptable
By tdktank59 on 6/6/08, Rating: 0
RE: Rebates are perfectly acceptable
By plinkplonk on 6/6/2008 7:14:58 AM , Rating: 2
ever since P4 intel have pissed me off... any advert on tv for a computer shop would be like "check out this awesome PC with an Intel Pentium 4 Processor *cue the music and the splash screen*" i mean seriously that had to be the most annoying ad campaign in history (donno if it was outside the UK or not) because it was so painful to see all these companies plugging intel (cash incetives) when AMD at the time were offering much better performance.

seems petty but im not too bothered about a couple of herz here n there so i go amd for not pissing me off :P

By Reclaimer77 on 6/6/2008 5:53:45 PM , Rating: 2
Yes but what you AMD guys refuse to realize is that in the eyes of the consumer, even during AMD's heydays, Intel was better. In the eyes of the consumer.

I was rocking an Athlon Xp and bashing the P4 too back then. But lets face it, the P4 had a great marketing platform and it wowed the consumer with high MHz numbers and good benchmarks.

To claim Intel is where they are at today just because of " unfair practices " is a bit biased. Intel is a giant thats highly diversified. They have had the hottest CPU brand in over a year now, and AMD is showing no signs of repeating their previous glory when they were able to topple Goliath in the eyes of PC techies.

The broad PC consumer base aren't tuners and builders like us who always know the hottest CPU-o-the-month. In the eyes of the consumer, Intel WAS/IS better.

RE: Rebates are perfectly acceptable
By Regs on 6/6/2008 8:08:38 AM , Rating: 2
Intel would not stop selling processors to Dell. Hah. No manufacture would cut off their number one supplier and vendor. One simply won't work without the other. Dell was just as guilty as Intel, or at least in AMD's point of view.

I also agree with others is that AMD missed their opportunities time and again. All AMD has to show for it is a native quad core getting "spanked" by two dual cores "taped" together. Their manufacturing process is slow and costly, their native quad core has lower than expected yields, and of course, Intel now holds the performance crown not only for enthusiast, but for most of the value segments.

And the more I read and gather, "Fusion" is starting to turn into another AMD Live! gimmick. If and when AMD can ever incorporate a GPU on a CPU and can give me more performance than a stand-a-lone, is likely when the market has changed from other developing and upcoming tech which will lead Fusion obsolete.

RE: Rebates are perfectly acceptable
By Regs on 6/6/2008 9:39:37 AM , Rating: 2
Though let me be clear that I'm not expunge Intel for being conniving. This was a important victory for AMD now that Intel has officially been labeled as a company that was involved in unfair business practices.

By frobizzle on 6/6/2008 12:46:33 PM , Rating: 2
Intel would not stop selling processors to Dell. Hah. No manufacture would cut off their number one supplier and vendor.

First, Michael Dell was so deep in Intel's pocket that he nearly suffocated from asphyxiation being submerged in pocket lint!

To address your point, no, Intel would never cut an OEM off outright as that would be the proverbail smoking gun. More likely, if you did not play nice with Intel (in other words sell little or no AMD CPUs) then strangely, your next shipment might be delayed for weeks or even months. That was their modus operandi.

RE: Rebates are perfectly acceptable
By just4U on 6/6/2008 1:08:31 PM , Rating: 2
All AMD has to show for ..

While they are not posting profits right now they accually do have some excellent products.

Their 780G chipset is by far the best on the market and even Intel's next offering supposedly wont come close to touching it. From the ATI standpoint, that 3X lineup was extremely good as well. They are quite competitive in the value side of the cpu market. Plus for a HTPC setup, those tri-core phenom's on a 780G setup would probably be a fairly dominant setup.

So it's not all bad for amd. Just no performance crown and still operating in the red (as they have thru-out much of their existance)

RE: Rebates are perfectly acceptable
By Regs on 6/6/2008 3:53:11 PM , Rating: 2
Their mobile platforms look terrific and most phenoms look reasonable. They have a solid line, but just not good enough. Simply said of course.

By Cheesew1z69 on 6/6/2008 1:23:04 PM , Rating: 2
Intel has been doing this for more than just the last few years....

"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone
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