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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."
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.
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.
It's not like these laws were put into place recently. Don't forget your foil hat.
Man blir trött av att gå och göra ingenting.
No there is no minimum price in the EU. There is however a rule saying that if you have a majority market share you are not allowed to lower your costs further than your production costs in order to try to kill competition.
The reason for this rule is that companies have in the past manipulated their prices in attempts to kill competition and thereby obtaining a monopoly. The airline SAS-Braathens was convicted of similar wrongdoings after they lowered their prices below their costs in order to kill competition and made up for it by charging multiple times typical airline fairs to destinations where they had a monopoly. The rules are very clear and established. Intel deliberately ignored them and are being punished accordingly. There's nothing strange here and the EU has been consistent about it. Intel and Microsoft got more attention because they are very large companies and the fines are based on your company's revenue. Other than that this is business as usual in the EU.
It is a practice called "DUMPING" designed to force the competition to either operate at a loss until they die or simply give up in the marketplace. Afterward, of course, the perpetrators jack their prices beyond what it should be, slow R&D so they can sell their old stuff faster and then set about abusing the market as a monopoly unimpeded.
Yes, indeed, it is illegal to "dump" your stuff in order to harm the competition.
Is the EU accumulating a huge debt? Is the EU even a government? Perhaps you should consider doing some more research before equating a fairly loose federation of independent nations with the United States of America which is just the one nation.
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.
That's just the point though; in the current market, Intel's influence >> AMD's influence. If Intel can keep doing this sort of stuff while AMD can't, it will continuously increase its market share until it becomes as dominant a player in the hardware field as Microsoft is now in the software field.
The EU apparently is extremely leery of letting a single corporation obtain that sort of leverage, and is trying to slap down the biggest competitor in a market whenever said competitor exhibits signs of wanting to abuse its near monopolistic leverage. That is to say, it's not the practices now that are truely troublesome, but the practices possible if Intel's market share grows that are making the regulators scared.
Off the top of my head, Intel makes about $6b a year in net income, so a 1.3b euro fine would be fairly hefty. Does anyone more familiar with Intel's finances want to comment on the effect the fine will have if carried out?
Signatures are the new names.
Oh in what world are dumping, price fixing and exclusive dealing considered anti-competitive? I have no idea, http://en.wikipedia.org/wiki/Anti-competitive_practices
In that alternate dimension where governments, not corporations, get to decide what the laws are. If Intel wants to do business in Europe, they have to abide by European law.
Rule of Slashdot #0: You and people like you are not representative of the larger population. - A.C.
It's socialist to require large companies to obey the laws in places where they do business?
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.
Please. It is a government. It can just print money if it wants to. As painful as the resulting inflation would be, that would be preferable to damaging the reputation of the rule of law on the continent.
Cue the brainwashed anti-trust crowd.
I think you misspelled "believers free economies"
weirdest thing I ever saw: scientology advertising on slashdot.
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.
Not an alternate dimension. This dimension. This plane.
Intel had a market-dominating position, with AMD barely sniffing that their knees in the early 2000s. They also had a big fat cash surplus. So, they decided that by selling at a loss, they could keep AMD from breaking into the market; once AMD was bankrupted, or not able to compete, then they could raise their prices back up and begin raking in the cash.
This is a very, very classic example of anti-competitive behavior. It doesn't get much more textbook than this.
No. Because Intel was dominant in the market, they couldn't sell at a loss to drive a much smaller competitor out of the market.
Note that this is illegal in the US as well as in the EU. I suggest before you get your panties in a wad about how this possibly couldn't be illegal, you actually bother finding out why it's illegal.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
You have no idea what anti-trust is all about, do you?
First of all, the rebates were not to all computer makers, they were to computer makers who would not carry AMD. So, if you were a computer maker that wanted to carry Intel, and you WOULD want to carry Intel since they were a near monopoly and for one reason or the other many of your clients would ask for Intel, then you would be at a price disadvantage if you also wanted to carry AMD.
Secondly, Intel was making enough money having most of the desktop market, yet AMD was gaining server market share with superior server products, so Intel tried to remove the competition from that market by going below cost until the competition was done.
So, it is not "illegal" when there are two companies on fair competition, size (actually market penetration) is indeed a factor and that is why there are anti-trust laws, which try to protect the consumer.
Let me give you an example in the US. I have heard cases where small ISP's started offering better/faster service than the large Cable providers in some areas. The Cable provider would suddenly undercut the small ISP by pricing at a loss at that specific area of service (which was only a fraction of the provider's total service so no real financial harm), which would force the small ISP close down. After that the prices were restored to even higher levels than before. So there are similar below-cost anti-trust laws like the EU, but sometimes companies get around them by claiming "limited time special deals" etc
So, do you think that Intel would keep selling below cost after AMD was done for? I am old enough to remember very well how much Intel CPU's used to cost before AMD started being competitive. Do you?
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This is not new, Walmart has been doing this for years. After you drive out competition, slow down R&D, and raise your prices, you get fat and slow. And when a nice lean company comes in and challenges you, you die of a heart attack.
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.
Please. Nobody prints money to create money any more... that's old school. They just make more loans and then sell the "paper" to some sucker as if it's tangible. The mortgage on your house effectively "printed" some more money.
In what alternate dimension does the EU exist where the above are illegal?
I think the "rebates" one depends on what the rebates are for. If it's something like a volume discount, it's probably ok. If it's something like "discount for not using AMD chips", it's probably not. I think something like the latter was one of the complaints in the US antitrust case against Microsoft.
Selling your main product below cost as standard practice (ie, not just for getting rid of outdated inventory) only makes sense to try to starve out a competitor who doesn't have enough cash reserves, and so I understand is generally considered predatory pricing which tends to be illegal.
It is actually called predatory pricing - where the supplier deliberately sets a low price to screw the competition.
Obviously it is not Intel's fault that AMD is not as successful financially, but with only two major PC processor manufacturers, what other reason for selling components at a loss would there be than trying to screw the competition? Computer manufacturers aren't going to start churning out more machines just because a single component is cheaper.
And that is not even mentioning the large rewards they offered for using their product lines.
At the end of the day, if you do not want to get fined for this crap, either do not do it, or do not be the market leader.
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!
It's not just about Intel and AMD, it's about the whole market. This kind of behaviour hampers competition, which in the long run hurts users. If some little company comes in with a wonder chip, we all want it to be in a market where it can succeed, not where it is unfairly squashed by this kind of behaviour.
"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.
That cannot be the reason here. It is neither a government nor an elected body that issues these fines. Furthermore; unlike some nations the EU itself isn't accumulating any debt.
"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.
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.
Prices below cost are unsustainable; they have to go back up eventually, and cost the seller money until then. This means that they only make sense if the intent is to bankrupt the competition so you can charge monopoly prices later. The consumers may seem to better off at the moment, but the problem is that they'll end up significantly worse off after not too long.
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]
You're not thinking long term enough.
Intel is betting on that by selling below cost for long enough they can bankrupt AMD. Once that is done, they'll have no competition and will be able to charge a much higher price. You won't be benefitting then.
And if it's allowed to go on, it'll last like that forever, as Intel can simply repeat the same trick if a new competitor comes along.
"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.
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 can be confusing, if you only think about the cheaper servers you get today. If you had been around before AMD was competing with Intel on more than the budget desktop space, or even worse when AMD was nothing more than a second-source supplier of x86 chips, then you'd see the danger inherent in this and be petrified. Do you know how much Intel charged for a server chip before the Opetron came out? A high-end Xeon could cost you $4000 just for the processor. Shortly after the Opetron, that dropped to just over $1k. When they had no competition in the server market, they could charge whatever they wanted, and they used the buckets of money made there to fund price wars with AMD on the desktop. When they had no competition in the desktop market, they simply charged whatever they wanted for all their chips.
So today you get cheap servers, sold below cost and funded by Intel's significant cash reserves and still quite high margins in laptops. Tomorrow, when cash-strapped debt-laden AMD folds because they can't afford to sell chips below cost, Intel once again has the market to itself. And. You. Don't. Want. That.
Whether it should be illegal or not is debatable, but whether it's good for you in anything but the very short term is not.
The enemies of Democracy are
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?
At the end of the day, if you do not want to get fined for this crap, either do not do it, or do not be the market leader.
It's not even about being the market leader. It's about being dominant. For example, you can be the market leader in a segment of the automotive industry, or toilet paper, or the detergent industry, or but that means jack diddly squat, because there are enough competitors in any of those markets that the market leader still won't have enough clout to pull off most of these stunts.
Excellent explanation. Thanks.
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
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)
And when a nice lean company comes in and challenges you, you die of a heart attack.
Nope, you do the same again to the lean company as it just doesn't have the money to out survive you. Monopolies can be hard/impossible to shift by market forces alone, which is why regulation is required to stop any fish getting so big it >is the pond. I think people are just waking up to the fact monopolies in computers are as bad as monopolies in any market.
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.
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.
Can someone please show me where Intel sold _below cost_ ? I fail to see how this is all relevant until someone actually comes up with numbers showing this. Discounts are given in every store and business in the world. Unless it's _below cost_ it's not illegal.
No, you either crush them as well or just buy them out.
Justice is the sheep getting arrested while an impartial judge declares the vote void.
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
That's why it's a court case, no? I suppose that's where the evidence gets presented.
Justice is the sheep getting arrested while an impartial judge declares the vote void.
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.
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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
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
Where do you expect to see it? We're talking about internal deals between companies, it's not like they publish the details of all their shady deals on their websites.
For instance, from the linked article:
If you expect to see an Intel CPU for $5 in a shop, you won't see it, it's not that simple.
The judge could of course demand the required information to tell whether that is the case, but given that "The European charges against Intel are confidential", I doubt we're going to see all the details
It wasn't just 'dumping' that they are being investigated for. They were preventing AMD from entering markets through condition-based incentives; i.e. 'I will give you {discounts,rebates} if you don't sell product from {AMD,other competition}.' It is fairly hard to compete in a market that refuses to let you in.
I know you have come to kill me.
Shoot, coward. You are only going to kill a man.
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.
The EU budget for 2010 is €139 billion. A fine of €980 million ($1.3 billion) would add 0.71% to this budget.
I don't think it's just a guise. Intel really appears to be guilty here, and are being punished legitimately. However, you're right that the EU is also motivated by the money, and the judgment is likely to be skewed by a conflict of interest.
I think a much better plan would be to use the money to fund a coupon program under which EU members can get discounts on competitors' products. That would be the most fair because the EU regulators would not have a conflict of interest. It would also really help those companies (ok, AMD) who were hurt by Intel's practices to regain ground that they lost.
Who do you think the money is going to?
\u262D = \u5350
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.
As you said it has to balance printing money and inflating. Why print when you can steal ?
An economy with anti-trust regulation is not a free economy. What part of freedom don't you understand ?
\u262D = \u5350
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.
If the EU finances itself with fines, the member states don't have to pay it. Simple transfer.
\u262D = \u5350
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
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
Huh? If there's a law, and Intel broke it, then why is anybody but Intel to blame?
No sig today...
"Intel and AMD vigorously compete." If by that you mean AMD fights tooth and nail to keep it's head above the water, yes.
Of course (at least here in the US).
That is all.
That's called abuse of percentage as a concept.
A fine of 980 million Euro would add... 980 million Euro. That's a lot of money.
I think you misspelled "believers free economies"
It cracks me up when socialists and big government types pull out the "but _I'm_ the real free market advocate!" card. Yeah, we get it. You think a free market is a "fair" market. Unfortunately, free market has a real meaning and it just makes you look like a jackass to pretend to be the Free Market Champion of the World.
Prices below market average -> Attempting to monopolize, anti-competitive dumping
Prices at market average -> Collusion
Prices above market average -> Abuse of monopoly position
Who gets prosecuted is a purely political decision.
If you don't know where you are going, you will wind up somewhere else.
There is no law. There are effectively "guidelines" left entirely up to interpretation. That's the problem with soft laws, they can be abused and selectively interpreted.
Let's say there's a law "thou shalt not abuse thine monopoly!". What the FUCK does that even mean?? It's retarded.
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.
"Afterward, of course, the perpetrators jack their prices beyond what it should be, slow R&D so they can sell their old stuff faster and then set about abusing the market as a monopoly unimpeded."
As long as there's someone bigger than you out there (and there pretty much always is), this will never be sustainable, so I wouldn't worry too much.
The problem is it wasn't DUMPING. The EU is lying if they claim anything was sold below cost. Sold below AMD's cost? Maybe, but that's not the point.
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?
so far I have only seen "allegations" stating this. Have any of the court documents actually stated that this happened?
I wish groklaw would delve into this :(
such allegations are usually not enough to even start a court case, AMD must have some "real" evidence.
but until court papers turn up in public, it's all moot and speculation.
Fuck off and die, motherfucker. Thanks.
Yeah, I didn't think you had any evidence, liar.
And your basing the existence on a conflict of interest on what? Money from fines is put into the general budget, which is agreed upon long beforehand. Any extra income does not mean the commision gets to spend more, it just means the member states pay less (and that's not even taking into account that the commission has far less control over the money it does have than most governments). By that logic all financial penalties, including fines and tickets should not go be paid to originating party.
That's called abuse of percentage as a concept.
A fine of 980 million Euro would add... 980 million Euro. That's a lot of money.
Well stated.
I would say that operating at a loss, in order to win, is VERY Competitive. What is the point of competition if you're not trying to win? I want to win, don't you? Don't you like to win so hard that nobody will even step up to you?
In many competitions people take personal sacrifices against their health, wealth, or social interaction time, to achieve success. This is no different: Intel decided to take a loss because they want to win. THAT IS COMPETITION.
Maybe it's not the kind of competition that you're into, the kind where people only do 'good enough'. The kind of competition where nobody can win --- everyone is special --- 'referees' step in to make sure some loser gets to pretend he's a winner and some hard-working winner gets held back from his deserved outcome.
I saw a recent article about a kid getting pulled from little league because he pitched too fast and it struck all the kids out... What a shame... The kid is a gifted and amazing pitcher, but instead of letting him prevail and win, the league decided to level the playing field by kicking him out. Now, which action stifled progress: the one where a kid worked so hard he was amazing, or the one where the league banned him for being so amazing?
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...
What? Let facts get in the way of a good rant? You do know this is /. right? ;o)
Abuse of monopoly in a market of 500 million people. So they got fined 2 euro per person they ripped off. We're talking small change.
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
It's quite simple. The guy with more money bleeds the other until they're bankrupt, then hikes prices. Put in very simplistic terms, imagine this: I challenge you to compete with me in a survival contest. You get left in a hermetically sealed cave with 2 weeks worth of water, food and air. I get in a hermetically sealed cave with 5 years worth of water, food and air. The folk on the outside who get to decide the winner will open up the doors after 6 months. Good thing is, whichever of us wins gets a cushy job for life afterwards. Want to play that game?
How does one manage to land a position on the EU regulatory board? How do you think a person keeps such a sweet gig? Voting for humongous fines against rich American companies has to be great for job security.
Only if the company getting a lot of influence is a non-EU company. If that company is an EU company, this would not happen.
Nope, the EU is happy to take on EU companies, for example it took on Nokia last year: http://www.eubusiness.com/news-eu/1206717427.67
If I have nothing to hide, you have no reason to search me
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!
$1.3 billion could feed a buncha kids in Africa. I wonder what the EU will spend it on...
So let me tell you: Fuck you!
I will from now on call myself a fair free market advocate.
And accusing someone of being "the Free Market Champion of the World" while GP never stated (s)he was a free market advocate.
And yes, if you corporations wish to push your dope on us, let them play BY OUR rules, not yours. Our corporations play by your rules when dealing in US.
BTW, I lived though US sponsored "free market" transformation of my country and that was a long lasting nightmare. I am thankful that EU accession required to deviate from US sponsored plan, enough to "wake up" from that nightmare.
When breaking into an established market - Competitive*.
When killing off new competition - Illegal and anti-competitive.
* Does not apply, if having a legal monopoly in one market, leverage a legal monopoly to gain a monopoly in another - a.k.a unCompetitive advantage.
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.