Slashdot Mirror
Intel Faces $1.3B Fine In Europe
Hugh Pickens writes "European antitrust regulators, who have been aggressively pursuing what they see as anticompetitive practices among technology companies, could impose their largest fine ever in a market-dominance case against Intel. The commission began investigating Intel in 2000 after Advanced Micro Devices, its arch-rival, filed a complaint. In two sets of charges, in 2007 and 2008, the commission accused Intel of abusing its dominant position in chips by giving large rebates to computer makers, by paying computer makers to delay or cancel product lines, and by offering chips for server computers at prices below actual cost. Some legal experts speculate that Intel's fine could reach about a billion euros, or $1.3B. 'I'd be surprised if the fine isn't as high or higher than in the Microsoft case,' said an antitrust and competition lawyer in London. In 2004 Microsoft paid a fine of €497M, or $663M at current exchange rates, after being accused of abusing its dominance; the EU imposed another $1.3B fine in Feb. 2008."
Now that's what I call a sticky situation.
Similes are like metaphors
It's not Intels fault they kick so much ass :O
Governments need someone to pay for the huge debt they're accumulating. Hey Intel, these guys, they have money. We can take it and spend it on programs that will make us look good, potentially reelected.
Sickening.
Cue the brainwashed anti-trust crowd.
\u262D = \u5350
I like Intel's hardware, it's really impressive. But that kind of crap can't go unpunished and it's nice to see a penalty with some teeth, even if it's only potential teeth right now.
It isn't? I wish I could kick that much ass by accident...
As much as I like to see anti-competitive practices punished, I'd rather the US regulators would do their job on occasion, not just the EU. Many of the companies who have been accused of anti-competitive practices are US companies, so the PR hit of being fined by their own side would perhaps hit home more than outsiders. That aside, is there any point to these huge fines? Guess who it's going to be passed onto? Intel gets fined and I suspect that by some remarkable coincidence the prices of their chips mysteriously increase.
In what alternate dimension does the EU exist where the above are illegal? Because AMD isn't large enough to do the same they get to have the EU demand minimum prices on processors?
"I use a Mac because I'm just better than you are."
the money should be going to AMD who suffered from Intel's actions, not the coffers of the EU beaurocracy...
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
It's a good thing that there is someone keeping these giant companies accountable, since the US system isn't going to enforce anything. Remember the DOJ's anti trust case against Microsoft? Microsoft technically lost that one, but it didn't seem to cost them anything.
We need to enforce a fair playing ground where companies can legitimately compete. AMD has been the biggest impetus keeping Intel's chips moving forward and keeping their prices lower.
I understand Intel can't go unpunished but the consumers are going to be the ones ultimately paying these fines. I guess it will help AMD as their performance:price ratio is already good. An increase in Intel chip price can only increase this in AMD's favor. I just wish AMD would get some of the fine as compensation, so that they can use it to invest in increasing their performance to match the new icore7 chips.
Again, unless they're giving these chips away, what's the problem? I'd be inclined to do the same thing, and I'd be shocked and amazed if the OEMs didn't suggest it and perhaps even push the idea themselves. (But honestly, both sides stand to profit from the arrangement. Follow the money...)
Well... this is the Wallmart Syndrome at its finest. Sell at or below cost until your competitors are bankrupt.
Just because Intel has money to burn, doesn't make it right. I don't see why anyone would encourage these practices, because they lead artificially deflated market prices for goods, coupled with monopolization, and sandwiched on top of a liquidity crisis. Does that sound familiar?
Because it should.
The consumers lose... the stockholders lose... Nobody wins here, except whoever got rich in the meanwhile.
It's socialist to require large companies to obey the laws in places where they do business?
The term 'anti-competitive' is what most companies desire to some degree or another; to reduce the effectiveness of or marginalize the competition. I'm against monopolistic behavior. And although MSFT and Intel may have raised the ire of the EU on this front, I'm waiting for the day the EU fines a business so much they simply stop doing business in the EU.
Someday, the irony might be that the EU's actions result in reduced competition when a company simply packs up their products and leaves.
No. That's an attempt at having real free markets for you. Or as close an approximation as is possible in real world anyway.
A free market doesn't work if the players in the market are allowed to alter the market's structure to their advantage. If someone tries, the way the EU deals with it is by slapping them down hard.
Okay. So first of all, the article did not state how steep the discounts are. They may indeed be below cost. We don't know.
Second, this is about Intel's business practices in Europe, not America. Governments (and presumably voters) in Europe get to determine what laws are passed there, and what laws are enforced there. Not Intel, and not you. "The problem" is that Intel appears to be in violation of several EU laws. The EU is taking steps to do something about it.
Why exactly would you think that Intel should be above European law?
Rule of Slashdot #0: You and people like you are not representative of the larger population. - A.C.
There is no fine, this is just a media frenzy obviously to whip up the news a bit.
The fine could be 20 billion, or there could not be a fine at all. Just sit it out and wait.
Here in the USA it is, yes. Here corporations do exactly what they want and if there is a law they disagree with, they just pay some politicians to get it changed to suite them better. When the same politicians retire from politics, they are given a VP position int he company they helped and make millions in pay offs
USA does not have a justice system, they only have a punishment system. This is the reason why USA with 5% of the worlds population has 25% of the worlds prison population.
If you mod me down, I *will* introduce you to my sister!
How are most of these practices problematic? Why should there be anything wrong with them selling chips for servers at below cost? Yes, it keeps them dominant but the result is cheaper servers for the rest of us. If the point of anti-trust regulations is to benefit the consumer then it isn't clear to me what the problem is with that aspect.
"it isn't clear to me what the problem is with that aspect"
Because once they drove AMD out of business they would have an effective monopoly and prices would have shot right back up and it's illegal to do this kind of below-cost-selling.
"the irony might be that the EU's actions result in reduced competition when a company simply packs up their products and leaves"
War is Peace, Freedom Is Slavery, Ignorance Is Strength, anti-competition practices reduces competition.
I don't mind seeing justice served, but I'm not a fan of the EU pocketing money. Can anyone confirm where the hell this money is going? I would hate to see the EU using this as a nice way to boost their books during the economic downturn.
"Sorrow is better than laughter, for by sadness of face the heart is made glad." [Ecclesiastes 7:3]
"Remember the DOJ's anti trust case against Microsoft?"
YEA, what Intel should do is get the themselves appointed to a compliance board set up by the EU to monitor their future behavior.
Clearly the company's great founder Mr. Intel, is probably rolling in his grave right now. His vision of every child in Europe having his very helpful processor thwarted by moneygrubbers and kid-haters. Weep for Mr. Intel's lost vision.
http://www.beanleafpress.com
Seems like if you're making tens of billions of dollars annually due to your dominance of the market, a piddly little couple billion dollar fine every few years is a small price to pay. The accusation against Microsoft, similarly, is that they just see the fine as a business expense. When the fine is a drop in the bucket, why not just pay the fine and keep doing what you're doing?
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Well, the article doesn't outline it and I don't feel like searching.
I guess since Intel may have paid computer companies to simply ignore using AMD components or avoid launching AMD-chip lines.
The thing that rubs me against this though is this...
So....Intel cuts prices to makers who use their chips, reinforcing the belief they should keep business with Intel.
I'm all for Intel getting a comeuppance ...but this badly?
import system.cool.Sig;
Also, it is true that fines are a significant portion of the EU's small budget.
If so, doesn't this make it rather difficult for the EU to be a disinterested, fair, regulator?
It seems like they would have an incentive to invent corporate crimes and then impose fines for them, regardless of the targeted behaviors effect on consumers.
(Not withstanding TFA, which I haven't read.)
Alcohol, Tobacco and Firearms should be the name of a store, not a government agency.
I accidentally modded parent redundant... meant to mod interesting or insightful, so I'm commenting to erase it.
Just wondering if Microsoft actually paid the fine? From TFA it says:
Microsoft general counsel Brad Smith said the company would "study" the ruling before deciding to appeal
Please make a CPU for me. Let me know when you're done.
A RepRap could in theory be advanced enough to do it. Yeah, and I could be advanced enough to shit gold.
This is one of my biggest pet peeves about the 'self-replicating' bandwagon. I'll be dead and buried before a RepRap can make a copy of itself from raw materials.
Okay here's the plan. Wait until the economy is in a downturn that some call a recession and some call depression, then slap some companies who indirectly are responsible for the newest industry with millions of jobs but is based in another country with a ten figure fine. So we can see the sticky liquid which has trapped all the ants. Who has a magnifying glass?
Sadly, a Libertarian cannot force his views on another, and freedom cannot spread as does the cancer known as religion.
I think the OP's suggestion is that the law (or such parts of it that apply to this situation) are in error
If you can't see the value in jet powered ants you should turn in your nerd card. - Dunbal (464142)
Pretty hefty amount given their balance sheet: http://finance.yahoo.com/q/ks?s=INTC
There are over 36 million lines of COBOL code in the world, and they are all raping children.
Intel hasn't prevented people from getting what they wanted. People pay for what they want unless the Gov gets involved. I've paid more for both when I wanted something based on the quality.
You know by this same logic MS should get paid by Redhat because you get a free os which is less than the cost to make it.
EU is just looking to make a buck and redistribute wealth. Socalists and Facist suck.
Are you telling that if Bob and Jim both are able to make a chip, and that Bob decides to offer
a chip made for 10$ to a client for 8$ , thereby costing him 2$, yet netting him a good contract, and a foot in the door to make a good impression so that the next time , he will be able to charge 12$ for a 10$ chip, this is what we call anti - trust?
Am i missing something here, or is the world falling apart?
But the OP, being an American, doesn't get to make that determination for Europeans. It's this arrogant notion that America should rightly determine the laws of every land that I'm objecting to.
Rule of Slashdot #0: You and people like you are not representative of the larger population. - A.C.
Remember that little crisis we are in. No not the war on terror. No not swine-flu. Or the bird-flu. No not the high oil-price that one is over. No it ain't the low oil price either. The credit CRISIS! Geez pay attention will you!
Anyway, the cause of it all is big american companies who got so big they also fell under EU regulation convincing the EU that the US regulation was though enough. The EU swallowed that ONCE and look what happened. Dead, misery, war, starvation!... well okay, a suicide, some fat cats moaning, just the same old wars as before and call girls making less money (newsoutlets in holland are so desperate for a desperate story they are now running how the sex industry is collapsing... in germany. Because all the ones in holland say they are doing fine, just a bit less trade because fewer americans are visiting (and doesn't that just say a lot about the good old US of A)).
Anyway, US has no regulation and won't be having any either. That is what you get when you elect between Wall Street Front guy #1 and Wall Street Front guy #2. You only pick really is wether they are more strongly tied to the hollywood lobby or the gun lobby.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
I'd like to see the day where the EU will do the same for Microsoft. I would like to see the day where I could buy a computer and either a) didn't have any OS installed (meaning I'd have to buy a Windows license if I wanted to buy it with windows) b) Force stores to give me the cashback if it came with a Windows OS and I didn't want to use it
After all, does the poster you respond to think that Intel abused its position to give the world cheaper chips? HA!
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Please. EU is the biggest market in the world, bigger than the USA. If a company pulls out or looses its positions in the EU market, its competitors gain so huge benefit that they can take challenge and take over markets of rest of the world. And by the way, when a company holds 70% - 80% of the market then it has gained an natural monopoly, competition in this kind of market happens only into extend that the company holding monopoly position or rules of the market allows it.
Survey research tool for commercial and scientific use
AMD, VIA or any x86 manufacturer would love Intel to go. The void would be filled fast, pooring money into Intel competition, which Intel wouldn't want as it makes for stronger competition.
Maybe AMD can compete with Intel dumping in the market in the same way, but doesn't look like it at the moment. But even if they can, what about others in the market? You end up with only those with deep enough pocket to survive, little to do with the product.
Actually, no, it's not all that perverse that they get most of their income from fines. It's much preferable, as an abstract concept, to (say) placing onerous taxes on everyone, as tends to be the common trend amongst governments. It'd be a much better practice to only 'tax' behavior which is seen anti-competitive and hostile towards the better interests of the society.
What's perverse about it is that the EU isn't an elected body. They're hand-picked goons by each country's respective government, and they govern by fiat. In theory, the EU is a pretty awesome idea; in practice, it's a goon squad on the lookout for themselves alone, with each country's representative looking out first for the EU, and second for their own country - preferably at the detriment of other member countries and companies which operate within those countries.
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
This is $4 from every American, and the money goes to European governments to increase their abuse of both their own citizens and Americans. Everyone loses.
Contribute to civilization: ari.aynrand.org/donate
Truly, this is being intellectually dishonest.
The fact that they're planning to take money from Intel, under the guise of Intel's supposed predatory behavior, is just that - a guise. The real purpose is to fill the coffers of the EU. Yes, they use a real justification which the majority of people will likely accept, but it's not the real reason they're doing it.
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
Every other step will slow down progress and delay the future. And thereby delaying cure for disease, solutions for energy-conserving hardware, the resources available to intelligent automation, and thereby continued exploitation of human workforce, etc etc etc
Wrong.
Intel is not punished for being successfull but for breaking the law. Since Intel is a pretty large company which can afford lawyers who can evaluate company actions beforehand, you can safely say that Intel willingly broke the law.
But maybe in your opinion, laissez-faire is the way of life and Al Capone was also punished for being successfull.
"It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
That's acceptable, but then again, why does the EU seem to think they can base their fine on sales made in other countries where perhaps this behavior isn't illegal? Seems kind of like the Europeans are trying to force their law on the rest of the world.
The letter contained three specific charges: that Intel offered discounts to a major European personal computer distributor to favour its products, paid a PC maker to delay marketing a model line using AMD chips, and also paid it to use Intelâ(TM)s own microprocessors in preference.
It's ambiguously worded, but my interpretation is that the allegedly infringing activities all occurred in Europe.
Rule of Slashdot #0: You and people like you are not representative of the larger population. - A.C.
I think this is unlikely as Intel probably makes more money in Europe in one year than this fine.
bLunaticTheoryHat = true;
Even if Intel did pull out of Europe, the EU could just invalidate all their patents in Europe and give the market to AMD.
What Intel is being charged for is illegal in the US as well, dumbass. Nothing to do with being successful. Everything to do with breaking the law.
Read this, you fucking ignorant moron.
Clever signature text goes here.
That's acceptable, but then again, why does the EU seem to think they can base their fine on sales made in other countries where perhaps this behavior isn't illegal? Seems kind of like the Europeans are trying to force their law on the rest of the world.
I said base the fine on sales made in other countries. Unless your interpretation is that all of intels revenue comes 100% from the EU, they are effectively basing their fine on income made in other parts of the world where it may or may not be illegal.
Intel has a huge, locked-in marketshare, and AMD only competes for a fraction of any OEM's buys because they are capacity constrained.
Intel can charge full price for the locked-in bulk of their sales, and then go and subsidize huge rebates for the portion of sales they actually compete for.
This grossly non-linear pricing scheme allows Intel to keep AMD sales in a little box, even while reaping monopoly profits... To counter the rebates Intel offers for the competed-for portion of their sales (subsidized by the profits of their locked-in sales), AMD would have to offer their chips for free.
It's called an abusive loyalty rebate, and when Intel has to actually compete on the merits of their products rather than coercing their customers, we'll have more choice and lower prices.
Brief overview specific to Intel:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1145327
General overview of loyalty rebates: (Read it and count how many times you think to yourself, "that's Intel.")
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1259830
How good i got my Thinkpad which costs $1000 in the US for â1500 here in Germany while those "large rebates" were still in place (this is in a country where people on average are 30% poorer than in the US ). Hope those legislators of ours impose some "fairness tax" as soon as possible so that next time i can pay â2K and get rid of all those guilt for buying superior products.
Sorry, I'm a little distracted. I didn't check out the nytimes article. So the fine is "up to %10 of world sales". Basing the fine on world sales does seem a litte unfair. I'd like to know more about the actual rationale for the numbers set for the fines, and whether the maximum fine is ever handed out.
More specifically, does the EU simply measure their fines in terms of % of world sales to gauge the impact of the fine on the company, or do they perform a calculation of the fine on the basis of "x% of chip value X number of chips sold worldwide". If the latter, that would be unjust, for the reasons you state. But if the courts decide on the fines for other reasons, and merely use the %10 of global sales figure as a cap, I don't see the injustice of that. Remember that a fine is not "damages", fines are meant to punish, damages are meant to put the wronged party right. The article suggests that such a high fine might bankrupt a company. I would bet that the courts would likely refrain from levying a fine so large that it would bankrupt a company. The %10 of global sales number might represent a statutory cap to prevent judges from getting too overzealous with their fines.
Rule of Slashdot #0: You and people like you are not representative of the larger population. - A.C.
I'm sure the AMD execs would be like this dog
Laissez lire, et laissez danser; ces deux amusements ne feront jamais de mal au monde. - Voltaire
But maybe in your opinion, laissez-faire is the way of life and Al Capone was also punished for being successfull.
Ignoring Al Capone's violence, are you suggesting that jailing people that broke the Prohibition laws was just, simply because it was the law...?
Drug dealers are scum.
"It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
If 50 percent of the fine was divided up and went to intel's competitors (via, amd, et al.) maybe it would have more impact.
Because the entity being targeted is Intel-the-whole-fucking-corporation. Not Intel's European sockpuppet.
What law has Intel objectively broken before the fact? None! Antitrust law is all subjective rulings after the fact. By its nature it is bad law, and does far far more to limit competition from new upstart companies than it does to beat down old established monopolies.
Nice tale, except that it has NEVER HAPPENED in real life. Never. Oh sure, lots of companies have tried it, but all have failed. The most entertaining example was the bromine market. Look up Herbert Dow.
Don't blame me, I didn't vote for either of them!
"Intel and AMD vigorously compete." If by that you mean AMD fights tooth and nail to keep it's head above the water, yes.
I predict that [H]ard|OCP will start posting all pissy news items about this, bitching that it's unfair that a US company has to abide by the laws of the EU, just because they do business there.
Granted, they'll phrase it differently and less obviously, but they've kept it up for Microsoft the entire time since they were first fined for breaking the law, so I doubt it'll be different for Intel.
if AMD had gone out of business because of it, your argument might make sense. But so far as I know, AMD still exists, so obviously the thing we're punishing someone for doing didn't actually happen.
If you're going to harsh someone for being competitive based on anything other than skill at making the product, then why the fark did the EU extend copyrights to 70 farking years? Yes, business get involved in marketing, competitive pricing, and etc. They also get involved in sitting on asine patents - want to actually do something about stupid-ass anti-innovation, non "fair" business practices? Then why do patent/trademark/copyright laws get worse every year, in both the EU and the US?
Of course (at least here in the US).
That is all.
I give your post a 3/5. You didn't use the word "corporations" in a pejorative sentence. You didn't say "fat cats". You failed to mention Evil Monsanto.
There was no law broken. It's like me making a law "you shall not screw over your neighbour". What the hell does that even mean? Laws should dictate exactly what is and is not permitted. This is all about bullshit socialist anti-corporation laws being intentionally broadened to bring in money and benefit companies in the EU.
I'm going to propose here in the US we pass a new speeding law. The new law is "You shall not drive too fast". Oh, how about instead of those pesky tax regulations we just change it to "you shall pay an appropriate amount of taxes or go to prison"?
You're a liar. Please produce evidence of Intel selling at or below cost. Yeah - didn't think so.
The problem with your "logic" is that there was no law. It's a bunch of loose language open to interpretation. You'll find Intel did not sell below or at cost. You'll also find that whatever "laws" the EU are using are not specific like real laws. E.g. killing someone, stealing something, etc... are clear. "Don't abuse monopoly power" is meaningless and entirely open to abuse by the EU.
What law has Intel objectively broken before the fact? None! Antitrust law is all subjective rulings after the fact. By its nature it is bad law, and does far far more to limit competition from new upstart companies than it does to beat down old established monopolies.
Exactly. These douchebag "real free market" people (socialists) like to harp about the law. But laws are clear. I can look at a law before I do something and know if it's legal or not. These "laws" being enforced by the EU equate to selective interpretation after the fact.
You'll find Intel did not sell below or at cost.
Proof please. I willing to have some confidence that if it's going through a court process then they much have some evidence to back up the claims. Where's yours?
Fuck off and die, motherfucker. Thanks.
Yeah, it's not like the EU and others don't do it either... hell, the ICC is why we passed the Hague Invasion Act.
Yeah, I didn't think you had any evidence, liar.
Bob and Jim both make chips.
It costs bob $10 to make a chip, but it costs Jim $14 to make a chip.
Kathy makes a doodad using one of the chips. Kathy posts on her website that she sold 100 doodads in 2008.
Bob tells Kathy he'll sell her chips for $20. Bob tells Kathy that as a bonus if she buys > 50 chips she'll get a $250 rebate. Bob tells Kathy that if she buys > 80 chips, she'll get an additional rebate of $470.
Meanwhile later that day, Jim talks to Kathy and says his firm price is $15 per chip...
That night kathy crunches some numbers, and determines that if she buys 90 chips from Bob, she'll get a total rebate of $720. She figures out that if she subtracts that amount from the $1800 it would cost her to buy the 90 chips, she ends up only paying $12 per chip, which is cheaper than Jim. She talks to her sales team, and they are confident they can sell between 90-100 doodads this next year, so she decides that she'll buy 90 chips from Bob, but will hold off on buying any more chips until halfway through the year to see how sales go...
So the next year, she only sells doodads that use Bob's chips and none that use Jim's chips, until August when she determines she's running low on chips, and decides to buy 10 chips from Jim for $15 each, since she doesn't qualify for a volume rebate from Bob.
At the end of the year, Jim goes to his friend Frank, who is a police officer, and says that Bob used his market dominance on Kathy to give her a rebate if she didn't buy any chips from Jim.
Frank looks at Kathy's purchase orders and notices that Kathy bought only from Bob and none from Jim back in January. He also finds records from Bob's ISP indicating that he looked at Kathy's sales reports for the previous year.
Jim tells franks that he crunched the numbers as said that if he wanted to sell 90 chips to Kathy for the price that Bob did including his rebates, Jim would lose money on each and every chip sold.
Frank determined that since Bob knew that Kathy only sold 100 doodads in 2008, that the rebate offer if she buys > 80 doodads was done on purpose to prevent her from buying chips from Jim because Jim would not be able to match that price, and consequently arrests Bob and throws him in jail for anti-trust...
who read that as a $1.38 fine?
Fucking aspirin peddlers.
http://tr.im/juqj
"If it moves, tax it. If it keeps moving, REGULATE it. And if it stops moving, subsidize it."-- Reagon
I'd like to buy homeland for our 10 million people. http://twitter.com/mahadiga
Funny how Slashdot marks down any politically incorrect post as flamebait. Don't rock the boat! Obey the groupthink! I wonder why I still bother posting here.
Don't blame me, I didn't vote for either of them!
There's an awful lot less scrutiny on your postings on an internet forum than there are in a court of law.
$1.3 billion could feed a buncha kids in Africa. I wonder what the EU will spend it on...
If they continue to go the monopoly abuse way, EU will increase fines till it's impossible to pay. Imagine if MS would get fined more then their yearly revenue, that would basically kill MS in EU.
AMD are an EU company? Since when? Perhaps you should let go of your anti-EU hatred and learn something about the case.