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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 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.

"My sex life is pretty good" -- Steve Jobs' random musings during the 2010 D8 conference
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