European Commission fines Intel $1.45 billion

[v_rr]

LONDON (MarketWatch) -- The European Commission said Wednesday that it has fined Intel Corp. /quotes/comstock/15*!intc/quotes/nls/intc (INTC 15.21, -0.16, -1.04%) 1.06 billion euros ($1.45 billion) for violating antitrust rules by abusing its dominant market position. The Commission said Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their CPU's from Intel. The company also made direct payments to a major retailer on condition that it only stock computers with Intel processors, the Commission said. The fine is the highest the Commission has ever imposed for antitrust violations. "Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated," said Competition Commissioner Neelie Kroes
http://www.marketwatch.com/story/european-commission-fines-intel-145-billion

[Psycho]

Press release: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/745&type=HTML&aged=0&language=EN&guiLanguage=en

What is the mapping of A,B,C D to Acer, Dell, HP, Lenovo and NEC?

[Sound_Card]

It would be kind of bogus if AMD does not get some of it for potential losses.

[Scali]

Don't mess with our Neelie :)

[Humus]

It would be kind of bogus if AMD does not get some of it for potential losses.

AFAIK they won't get a penny out of it. They'll hopefully get a more fair marketplace in the near future though.

[StefanS]

It would be kind of bogus if AMD does not get some of it for potential losses.

Nope, AMD gets nothing, it is a fine and not compensation or damages. The money will go into the EU budget and will be used to lower this year's EU membership contributions by the member states.

[Sound_Card]

Thats pretty lame then. Though, perhaps as pointed out, the market should be more fair for them.

[StefanS]

Thats pretty lame then. Though, perhaps as pointed out, the market should be more fair for them.

The argument of the commission goes as follows: European consumers (i.e. tax payers) paid the price for the violation of anti-trust laws, so they should get an indirect refund by lowering their states' contribution, albeit only temporary.

AMD should profit from a fairer market. If they want compensation they'd have to sue Intel, but my knowledge on whether or not a law suit would be possible, much less successful is very limited, not to say non-existant :cool:

[Scali]

Intel wants to argue that the consumers did NOT suffer, because all Intel did was LOWER the prices. So if anything, the consumers paid less, not more.

[pcchen]

It would be kind of bogus if AMD does not get some of it for potential losses.

The problem is though, in principle, it's difficult to argue that these anti-competitive behaviors hurts AMD only. For example, if AMD is compensated, VIA may also claim that they should be compensated too.

[ChrisRay]

Intel wants to argue that the consumers did NOT suffer, because all Intel did was LOWER the prices. So if anything, the consumers paid less, not more.

Where is Intel saying this? I'm just curious. Not that I disbelieve or anything. I just haven't heard that yet.

[dZeus]

Intel wants to argue that the consumers did NOT suffer, because all Intel did was LOWER the prices. So if anything, the consumers paid less, not more.

if anything, the EC can only argue that consumers MIGHT pay too much in future, if Intel manages to drive AMD out of business by the practices deemed illegal. Even that might be questionable, as ARM might turn out to be a bigger competitor to Intel than AMD in 5 years.

If AMD does not go belly up, then it is next to impossible to estimate the effect to consumer prices of CPUs due to the effect of Intel's practices.

It should be much easier to judge the effect on AMD's profitability though :D

[Scali]

Where is Intel saying this? I'm just curious. Not that I disbelieve or anything. I just haven't heard that yet.

In the official press release:
http://www.intel.com/pressroom/archive/releases/20090513corp.htm?iid=pr1_releasepri_20090513r

"Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal."

[ChrisRay]

Interesting. Thanks.

[Davros]

"Intel takes strong exception to this decision. We believe the decision is wrong

How can you possibly beleive its ok to bribe retailers not to stock the goods of your competitors

[cal_guy]

The argument of the commission goes as follows: European consumers (i.e. tax payers) paid the price for the violation of anti-trust laws, so they should get an indirect refund by lowering their states' contribution, albeit only temporary.

AMD should profit from a fairer market. If they want compensation they'd have to sue Intel, but my knowledge on whether or not a law suit would be possible, much less successful is very limited, not to say non-existant :cool:

In fact AMD has in fact filed a antitrust lawsuit against Intel.
http://news.cnet.com/AMD-files-antitrust-suit-against-Intel/2100-1001_3-5765844.html

AMD benefits by getting evidence gather by the European Commission for their own lawsuit.

[Raqia]

This is a pretty subtle case. On the one hand, it's difficult to show Intel did anything conclusively illegal, on the other, there's a lot of formal statements by vendors against Intel so they're obviously none too happy with its behavior, and apparently Intel has done quite a bit to conceal its anti-competitive behavior too:

http://money.cnn.com/2009/05/14/technology/parloff_intel.fortune/index.htm?source=yahoo_quote

The conclusion of this article isn't particularly neutral, but it does present both sides of the case pretty well. Intel shouldn't be punished if it indeed do nothing but innovate for the consumer's good, but it's clear from past anti-trust cases and current evidence that one can be anti-competitive using very indirect methods.

[ChrisRay]

Another thing to point out. It wasn't just AMD who suffered from this. Nvidia, Via also got shafted by some of the things Intel has been doing. Heck intel was doing it to ION ((which got noted in this case)) which is fairly recent.

[Davros]

maybe, but nv deserved a shafting

[ChrisRay]

Don't care what you say/or feel. Nobody deserves to be knocked off the market because of things like this. If Nvidia deserves it. So does AMD and Via because its a free market AMIRIGHT?! I'm sure you'll reply with "But Nvidia does bad things too! So that makes it ok!". There is no such thing as "two wrongs make a right". If there was. Then every vendor in this market would be game for this kind of practice.

The point is everyone here lost out. Theres no justification for what was done/stated in this trial.

[Florin]

maybe, but nv deserved a shafting

This is just weird

[Davros]

As you can tell im still pissed at them for not letting me run sli on my intel board