Monday, May 11th 2009
EU Completes Intel Antitrust Case Investigations, Likely to Find it Guilty: Sources
The European Union trade regulatory body is expected to announce its verdict on the high-profile antitrust case against Intel on Wednesday. The company has been booked under charges relating to market malpractice, by influencing computer hardware manufacturers to postpone and/or cancel launches of their products that use CPUs made by its rival AMD. Intel allegedly abused its market position in the CPU industry, to cripple the growth of AMD in Europe, by offering special rebates to computer hardware manufacturers to restrict or eliminate the use of AMD processors. The company allegedly even influenced retailers by offering inducements to sell computers only with Intel processors installed.
The first violation by Intel is that it allegedly set set percentages of its own chips that it wanted PC makers to use, according to sources. Examples include NEC, which was told that only 20 percent of its products could use AMD processors. All Lenovo-made notebooks use Intel processors, while 95% of HP's product-line features Intel processors, sources said.
The second violation was where Intel bribed PC makers to delay or scrap the launch of their products that feature AMD processors, to favor Intel best. The Commission will characterize the payments as "naked restrictions" to competition, the sources said.
When found guilty, the commission will take two forms of action against Intel. A date will be set, following which, Intel cannot offer the rebates and other inducements EU finds illegal. A fine will also be collected from Intel. The commission can charge as much as 10% of Intel's annual revenue as fine, which was $38 Billion in 2008. The trade commission's decision set for Wednesday is said to be extremely complex and lengthy, in order to safeguard the antitrust enforcer against any possible legal challenges from Intel, which is likely to face one of the highest fines in Europe's antitrust history, according to Brussels-based lawyers. Intel's trouble in Europe began in 2000, when AMD complained that Intel was blocking its access to the European market.
Sources:
Reuters, The Wall Street Journal
The first violation by Intel is that it allegedly set set percentages of its own chips that it wanted PC makers to use, according to sources. Examples include NEC, which was told that only 20 percent of its products could use AMD processors. All Lenovo-made notebooks use Intel processors, while 95% of HP's product-line features Intel processors, sources said.
The second violation was where Intel bribed PC makers to delay or scrap the launch of their products that feature AMD processors, to favor Intel best. The Commission will characterize the payments as "naked restrictions" to competition, the sources said.
When found guilty, the commission will take two forms of action against Intel. A date will be set, following which, Intel cannot offer the rebates and other inducements EU finds illegal. A fine will also be collected from Intel. The commission can charge as much as 10% of Intel's annual revenue as fine, which was $38 Billion in 2008. The trade commission's decision set for Wednesday is said to be extremely complex and lengthy, in order to safeguard the antitrust enforcer against any possible legal challenges from Intel, which is likely to face one of the highest fines in Europe's antitrust history, according to Brussels-based lawyers. Intel's trouble in Europe began in 2000, when AMD complained that Intel was blocking its access to the European market.
82 Comments on EU Completes Intel Antitrust Case Investigations, Likely to Find it Guilty: Sources
Laws should be simple. Judgement should be simple. A one thousand page document of complex legal "self-protecting" bureaucracy should, IMO, not be allowed. The EU is beginning to crush itself under it's own weight of legal and tax rules. But the first to suffer is anyone, or any company, that has to fight against it's omnipotent judgements.
Intel may have done something incorrect, but this whole process is wrong. And 105 of annual revenues? What nonsense. How is that related IN ANY WAY to the economics of the situation.
The EU is ruled by bureaucrats and lawyers that are able to make ever more work for themselves and their ilk... with one single objective... so syphon off the productive labours of enterprise into the coffers of the quasi-govt institutions.
if intel dont respect the law ... must pay... :)
show me the money :) (in console) :)
They do it with the full understanding that they will have to pay up and so they factor it into their budget before they even begin.
The government doesn't want it to stop, because they can keep making money from them every few years for more and more money. If they wanted it to stop they would just revoke their right to market in that country.
Money has to come from somewhere :)
To hell with the EU Intel. Keep making awesome CPUs. They don't like it then don't sell it to them. :rockout: I may buy Intel next time just to spite the EU.
If Intel did something wrong, ok, they should pay up, but who's gonna get that money? Will AMD see a dime of the money paid?
Intel deserves to be the only X86 CPU maker. Had the market ratio been CORRECTLY and LEGALLY done... Think of how good the Phenom II could have really been. Think about how much more AMD could have improved with the R&D Dollars...
ALSO- Its EU regulation that 60% of the damn fine goes straight to AMD's coffers.... so shut up about "Oh EU needs money... they are the mob" crap.
AMD/Via should be filing these lawsuits, not a government body. The only exception is, for instance, Rockefeller's Standard Oil where there was no competition (Standard Oil bought it all). When a government goes for anti-trust, they really can't lose. This is why anti-trust lawsuits by a government body should be the exception, not the norm.
Also, as much as Id like to see intel punished, AMD hasnt done enough to sell its processors either. I am not saying they should be shady or anything, but they need to get their name out there more. This is coming from one huge ass AMD Fanboy
Well done EU
With more money, AMD could have made a better line of CPUs and, with them, giving Intel a run for their money on the CPU market.
Because of this, Intel didn't lower their prices as much as they would and ended up charging more for their CPUs, which made them much more $$$ then the fine's value, IMHO.
This is why i think Intel isn't getting hit hard enough with this fine. On top of that, only 60% of the fine will go to AMD? :eek:
EDIT
If AMD had managed to make a better line of CPUs, by competing on a more equal level with Intel, their prices could still have dropped as much as they did: the difference is that Intel's prices would have dropped as well.
This article describes my stance rather well:
www.cato.org/pubs/policy_report/v21n2/cpr399.pdfIf AMD were being sued by the EU for anti-trust, I'd be every bit as angered by it. If you aren't guilty of directly eliminating competition (see Stardard Oil and US Steel), you don't deserve to have a government breathing on your neck.