EU Slaps Intel With Formal Antitrust Charges

castrox writes "Intel is now facing a prolonged legal battle in the European Union for engaging in anti-competitive practices. The courts allege that Intel made at least one arrangement in Germany to ensure that PC manufacturers could only use their products. From the article: 'The investigation in Europe has been going on for a long time. Intel's European offices were raided by EU investigators in 2005. Last year, AMD filed a formal complaint with the Bundeskartellamt, the German Federal Cartel Office, accusing a German and Intel of entering into an agreement under which the German retailer would only sell Intel PCs in exchange for undisclosed payments from Intel. The EC quickly took over that investigation from the Bundeskartellamt.'"

Comments

AMD..

[ilovegeorgebush]

Seems like this is a blessing indisguise for AMD...or not? From TFA:

AMD can use some good news, as the company has fallen from its glory days in early 2006, when the chip maker had passed 20 percent market share. Strong competition from Intel's Core Duo and newer Xeon lines of CPUs have hit AMD hard, and the company continues to lose money despite rising sales: the company reported a $600 million loss last quarter. AMD has high hopes that its purchase of graphics card maker ATI, combined with upcoming Barcelona CPU technology, will be enough to turn the company around.

Will this have any affect on Intel's stranglehold on the market though? This whole situation is reminiscent of Microsoft and the EU a few years back. Even that barely stopped them. I doubt this'll do much for AMD...much like it didn't do much for Netscape in the browser wars (MS forced to remove IE as the default browser from new Windows installs).

FYI: "Market Development Funds"

[asphaltjesus]

Depending on how you do it, it's not illegal. But most of the time there is a mixture of legal and illegal MDF usage pretty much everywhere in the world.

These kinds of market development funds are used to take valued decision makers on vacations, the usual wine and dine and some more unusual things, some of which are legal in Las Vegas. It's a very cozy relationship. So cozy that any hint of a competitor would **really** disrupt the good times.

Think about it this way. Either Intel keeping you in wine and roses or the MDF goes to your competitor while you have both Intel and AMD's sales people whining in your office once a quarter with less MDF coming in the door overall and fewer perks overall.

Re:what is fundamentally wrong about it?

[ObsessiveMathsFreak]

Capitalism is a force. Used wisely, it can be of great benefit. Left to its own devices, capitalism can trample the very society that supports it. It needs to have limits.

Left alone, agreements like this can erode the supposed free market in which they exists, leading to monopoly, reduced quality and higher prices. We have anti-trust agreements to protect consumers and producers. You may believe in some pure and unadulterated laissez faire market system, but the fact is that has been proven to be unworkable, no matter how many poor excuses are thrown up.

Monopoly: AMD can't even give chips away.

[Visaris]

Comments by AMD's Hector Ruiz really struck a cord with me:

www.cbronline.com

In the case of HP, he said, AMD could not even give away a million processors for free, due to the fear of the potential of Intel punishing the PC maker.

If you trust Ruiz, this comment should be all you need to know. If Intel is being such a monopolistic bitch that AMD can't even give away chips to HP, I wonder what other cases are going undocumented. I really hope AMD gets the monetary compensation they deserver, as I promise you that Intel's anti-competitive tactics aren't helping the consumer any.

Re:US Companies

[mean pun]

Why does the EU always seem to come down on US-based companies that control a large portion of specific markets?

Because

• US media, including /., rarely report on cartels involving no US-based companies: for example, for some reason people in the US don't seem to be well-informed about the beer, paper, banana, gas switchgear, and rubber cartels (from just the first two Google pages on 'european commission cartel').
• US-based companies sell lots of stuff in Europe, and therefore have plenty of opportunity to do illegal or suspect things: there is a reason North-Korean companies are rarely sued.