Intel to be Slapped with Greatest Fine in EU History

[btarunr]

It is predicted that silicon giant Intel may face the greatest fine for its alleged anti-competitive practices, in a case heard in the European Union. Intel is currently being investigated for irregularities including encouraging hardware vendors not to use AMD products, and offering discounts. Legal analysts estimate the fine to be well over 1,000,000,000 EUR, over double that of what is heading Microsoft's way. In a statement to the New York Times, says Howard Cartlidge, head of the EU competition group at law firm Olswang in London, "I would be surprised if the fine isn't as high or higher than in the Microsoft case. Technology markets are where the European Commission has perceived particular problems due to dominant companies."

The ongoing trial in EU runs parallel to similar anti-competition trials in Japan and Korea, where Intel is found guilty. It is a joint effort between EU and United States Federal Trade Commission investogators. Despite previous convictions, Intel maintains that it has done nothing wrong and is confident of being found innocent. Says Intel spokesperson Robert Manetta, "Overall, Intel's conduct is lawful, pro-competitive and beneficial to consumers." Naturally, AMD begs to differ. Sources in AMD reveal that Intel conducted anti-competitive practices throughout, to maintain an 80-20 competition. The number took very little change even when AMD was at the peak of technology advancement over Intel.

View at TechPowerUp Main Site

 

[twilyth]

Excellent news!

And . . . I couldn't resist

"One . . . . Billlliiioonnn Euros"

 

[farlex85]

Down with the machine

I wonder though, is providing discounts and encouraging vendors to use their product really illegal? Isn't that the name of the game?

 

[LittleLizard]

oh crap, hope this wont give hard times to intel

 

[shiny_red_cobra]

Providing discounts should be fine, any company can set any price it wants for its products. Of course, when there is competition, that price has to be around the market price or else they wouldn't sell many units. Again, entirely up to the company though. The big no-no is telling people not to use your competitor's products. I think this is pocket change for Intel though, they made billions with their Core 2 line of CPUs.

 

[h3llb3nd4]

I hope intel don't stop making awesome chips...

 

[farlex85]

Providing discounts should be fine, any company can set any price it wants for its products. Of course, when there is competition, that price has to be around the market price or else they wouldn't sell many units. Again, entirely up to the company though. The big no-no is telling people not to use your competitor's products. I think this is pocket change for Intel though, they made billions with their Core 2 line of CPUs.

I guess that's a no, but when promoting your own product aren't you essentially saying the same thing (don't buy them buy me)? Seems like semantics. Although I'm sure there's technicalities involved here we aren't privy to. Ultimately to me though vendors who accept intel's "bribe" (if that's what it was) should be more heavily penalized than intel. They (the vendors) would be the ones who created the monopoly, every company that is successful will strive to be a monopoly, tis the nature of business.

 

[twilyth]

There's nothing wrong with giving someone a discount to buy your stuff. The problem is when you make the discount conditional on NOT buying someone else's stuff. Value added resellers are going to buy whatever their customers want. Some will want Intel, some will want AMD. By making the discount conditional, you prevent that reseller from buying ANY AMD chips - or just a token amount. THAT is called 'restraint of trade.'

 

[TheGuruStud]

There's nothing wrong with giving someone a discount to buy your stuff. The problem is when you make the discount conditional on NOT buying someone else's stuff. Value added resellers are going to buy whatever their customers want. Some will want Intel, some will want AMD. By making the discount conditional, you prevent that reseller from buying ANY AMD chips - or just a token amount. THAT is called 'restraint of trade.'

If the rebates didn't work, intel would threaten cutting of chip supply completely. They all caved and became little bitches. They should all be ashamed.

 

[Studabaker]

I hope intel don't stop making awesome chips...

Oh yeah, this will surely kill Intel and all we'll be left with is AMD

 

[h3llb3nd4]

I don't know

 

[DaedalusHelios]

Offering discounts is anti-competitive?

Sounds like Intel didn't bribe the right people like EU companies do. Its a shame but US companies cannot openly bribe, despite it being openly accepted in the many European countries as a common practice to bribe in business. I have seen it first hand in the defense industry. Its pretty bad when US companies end up taking the high road when compared to their various counterparts overseas and missing out on some business. Intel didn't bribe, they offered discounts. Its weird to see the US companies doing the right thing and having money taken from them by a currently strapped for cash EU.

Its fine to say don't use the competitor's offering, and saying our offerings are better etc. Why would a company say,"Please use our competitor's stuff instead". Its rediculous.

 

[swaaye]

Intel has done shady stuff.

They've been said to penalize companies for using non-Intel products. They'll give you a super awesome deal if you are Intel-only. Try to sell some AMD stuff and they kill off your deals. So, you end up screwed big time compared to your Intel-only competition. So you can see that with their seriously dominant position, they can pretty much control the market with such moves. Remember how long Dell was Intel-only? When they started selling AMD hardware it was a very big deal.

I don't know all of what Intel's accused of. I also doubt that AMD is all-perfect either. Big business isn't exactly 100% about the good of the market or the consumer and these companies really will do whatever they can get away with to make a buck.

 

[FordGT90Concept]

I wonder though, is providing discounts and encouraging vendors to use their product really illegal? Isn't that the name of the game?

I don't see how it could be. It's just another case of the EU looking to steal money from the USA without getting return-prosecuted for it.

 

[soryuuha]

This is not super special awesome.

 

[twilyth]

Intel has done shady stuff.

They've been said to penalize companies for using non-Intel products. They'll give you a super awesome deal if you are Intel-only. Try to sell some AMD stuff and they kill off your deals. So, you end up screwed big time compared to your Intel-only competition. So you can see that with their seriously dominant position, they can pretty much control the market with such moves. Remember how long Dell was Intel-only? When they started selling AMD hardware it was a very big deal.

I don't know all of what Intel's accused of. I also doubt that AMD is all-perfect either. Big business isn't exactly 100% about the good of the market or the consumer and these companies really will do whatever they can get away with to make a buck.

At least in theory, the whole idea of capitalism is to achieve efficiency through enlightened self-interest. But for it to work, you have to have some obstacles to rampant greed - like the anti-trust laws.

All the intel fanboys can say that poor intel is getting the shaft, but when every regulatory body in the world is either investigating your business practices or has officially determined that you are a bully and a thief, then maybe there's something to it. Although the big conspiracy theory is much more probable of course.

 

[phanbuey]

I don't think its the "discounts" -- its the fact that vendors and parthers who bought BOTH AMD and Intel chips did not get "discounts"... only the people who sold Intel-Only products got "discounts". And that is anti-competitive...

"Yeah I'll give you a discount... oh wait, you sell AMD systems as well? Erm.. No discounts (unless you stop selling AMD chips hint hint wink wink), sorry."

How is that any different from "I'll pay you not to sell the competitions product"? Its just a round-about way of giving money to people to carry only one good.

 

[Mussels]

I know what this is about. its pretty simple.

"If you buy from intel, we give you this CPU for $100"
"if you can prove you dont sell AMD either... we sell it to you for $75"

(prices are a made up example)

 

[phanbuey]

its amazing how long ago this was, and how it just now is getting sorted out.

 

[Blacksniper87]

anti-trust laws what a load of bulls#$t EU is just doing some large scale revenue raising. I can imagin the headlines "Fighting the recession case by case". Greedy bastards trying to dig themselves out of the recession by taking a companies hard earned cash

 

[tkpenalty]

anti-trust laws what a load of bulls#$t EU is just doing some large scale revenue raising. I can imagin the headlines "Fighting the recession case by case". Greedy bastards trying to dig themselves out of the recession by taking a companies hard earned cash

Actually when you observe what OEMs have been doing over the past decade, what Intel is accused of is feasible. 80-20 competition, DEFINATELY. Remember the Pentium 4 Days? During the netburst days Athlon had sheer technological dominance, and Intel's offerings seemed to be a joke.

Enthusiasts and reviewers everywhere generally said that. However over in the OEM sector; what caters a majority of the users, oddly enough AMD offerings in OEM solutions such as Dell HP, etcera were almsot non-existent.

Now why would OEMs give themselves a MAJOR pain in the backside in terms of customer service by using the slower, more expensive, and less reliable, power guzzling solution?

Northwood to Prescott, we see CPUs that run bloody hot, yet give poor performance in contrast to AMD which had faster, cheaper and cooler solutions. Yet the illogical happened.

A shady Pair gain deal would have made much sense, Intel gives discounts if they dont use AMD hardware, this would prove to Firms to be desirable as it would maximise profits while minimising manufacturing costs. Since Intel would have been to most OEMs with this deal, AMD's dominance would have been cancelled. Not saying that Intel did this but its plausible.

The EU should pay AMD however, and not just pocket the money themselves. I agree that the EU is using rather unscrupulous means to get themselves out of the financial crisis, but the fact is that Intel is still guilty.

 

[Flyordie]

Tk hit the nail on the head. GJ.

 

[FordGT90Concept]

The Intel brand moves product just as the Microsoft brand moves product. When people buy their stuff and never have problems, there's no reason to stop. That's why it is so hard to reverse market dominence. You have to convince potential customers, beyond a shadow of a doubt, that your product is better than theirs. Apple managed to do that to some extent with Mac and back in the Athlon 64 days, AMD manged to do that with AMD64.

The reason Dell didn't offer AMDs is because people didn't demand it and it also means issuing twice the number of SKUs for their product lines. Buying one product enmasse is cheaper than buying duplicate products from multiple vendors. The only reason why Dell changed their position is because people started demanding AMD products because they heard they were better.

It doesn't matter whether or not Intel is/was guilty of any anti-trust law. Intel will have to pay if they want to continue to sell products in the EU. The EU feels they have nothing to lose when they win (notice the wording there--EU can't lose).

 

[alexp999]

So thats how the EU is bailing the banks out.

Really does the EU have nothing better to do than fine everybody :shadedshu

 

[btarunr]

EU isn't the only one with the contention that Intel is into market malpractices. Korea and Japan back EU's contention with their own trials. Besides EU is also using USFTC for the investigation. If proven guilty, a US federal agency will have backed EU. One can't corner and bitch at EU.