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Intel Receives Record Fine By the EU
Firefalcon writes "Intel has been fined a record 1.06 billion euros ($1.45 billion / £948 million) by the European Competition Commission after being found guilty of anti-competitive practices. This makes Microsoft's 497 million euro fine in 2004 (which was a record at the time) seem like a slap on the hand. Reports had previously suggested that the fine would be similar to Microsoft's. Intel was charged (among other things) with encouraging manufacturers and retailers to purchase fewer (or even not stock) AMD processors. More details of the ruling are on the European Commission's Competition website. Intel said they will appeal the fine."
I think the difference here is that Office Max can't give you a bulk discount contingent on you not buy from staples.
Ex (ok):
Office Max: Pens are $1/ea, but if you buy 100,000+, they are $0.75/ea
Ex (not ok):
Office Max: Pens are $1/ea, but if you buy 100,000+ AND no more than 10% of your purchased inventory comes from our competators, they are $0.75/ea
Self proclaimed typo king, and inventor of the bear destroying coffee table (patent not pending).
It is legal and ethical for a non-monoplistic company to offer volume discounts.
It is NOT legal and NOT legal for the single biggest chip maker to insist you don't buy their competitor's product except in minimalistic amounts.
The differences are
1. Volume discounts are not affected by your purchases from a competitor. They are simple standardized discounts.
2.When you are so big and powerful that your clients literally fill threatened and has no choice but to acccept the terms of your contract, then yes the government DOES get to affect the terms of the contract.
excitingthingstodo.blogspot.com
Sorry to shatter your worldview here, 1 and 2 are not related. The fine is not even close to help out of any recession...
why does Slashdot not display the Euro sign correctly when pretty much every other internet forum does?
because of the encoding they use in their html. It is ISO-8859-1 not UTF-8
Since when did /. start letting in non-geeks? :P
Dual Opteron < $600
"encouraging manufacturers and retailers to purchase fewer (or even not stock) AMD processors." How could that possibly be illegal?
How about this "In addition to providing rebates to manufacturers that bought almost entirely Intel products, the Commission found that the chipmaker had paid them to postpone or cancel the launch of specific products based on AMD chips."
"I have downloaded hundreds and hundreds of records, why would I care if somebody downloads ours?" Robin Pecknold
Well, Euro fines doesn't work that way. First, you get initial warning and fine. After that, you got monitored for years for repeated abuse. If that happens - slap, another fine, possibly even bigger. In the end, Intel will have to comply. Because it's ain US, where you can drag out case in the court. You have to pay fine first.
user@ubuntubox:~$ stfu This server is going down for shutdown NOW!
ampersand euro semicolon works in my preview: €
"The Commission finds that Intel did not compete fairly, frustrating innovation and reducing consumer welfare in the process," Neelie Kroes, the European Commissioner for Competition Policy, said at a Brussels news conference announcing the fine. "Given that Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for over five years, the size of the fine should come as no surprise."
...
...
The violations took place between 2002 and 2007, when Intel controlled at least 70% of the world market for microprocessors, Kroes said.
"Intel awarded major computer manufacturers rebates on condition that they purchased all or almost all of their supplies, at least in certain defined segments, from Intel," the Commission concluded.
The Europeans began their investigation in July 2007, and their findings should help U.S. regulators, said David Balto, a senior fellow at the Center for American Progress and a former antitrust official at the FTC and the Department of Justice. He noted that Intel also has been found in violation of antitrust laws by Japan and Korea.
"The relief that the Europeans imposed I think will provide an excellent guide to U.S. enforcers as they try to determine what to do about Intel's exclusionary conduct," Balto said today.
"Their website invites visitors to add their 'vision of tomorrow,' " [Kroes] said. "Well, I can give my vision of tomorrow for Intel here and now: "Obey the law"."
Link.
From the accompanying memo:
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/235&format=HTML&aged=0&language=EN&guiLanguage=en
Where does the money go?
Once final judgment has been delivered in any appeals before the Court of First Instance (CFI) and the Court of Justice, the money goes into the EUs central budget, thus reducing the contributions that Member States pay to the EU.
From the European Commission press release:
Intel gave rebates to computer manufacturer A from December 2002 to December 2005 conditional on this manufacturer purchasing exclusively Intel CPU
Intel made payments to computer manufacturer E provided that this manufacturer postponed the launch of an AMD-based notebook from September 2003 to January 2004.
and many other examples that no one can deny are illegal. My only complaint is that the fine should have been higher than 4% of Intel's revenues in 2008, and a part of it should be given to AMD.
As they've slapped plenty of EU companies with fines for anticompetitive behavior, your accusations are fairly unfounded.
According to the NYTimes article http://www.nytimes.com/2009/05/14/business/global/14compete.html, the fine has to be paid right away. The money is placed in a bank account until further appeals are resolved.
Err, no? And last I checked, it wasn't the case.
I'm not a big supporter of Intel's practices, and a strong opponent of anything Microsoft does, but come the fuck on! Is that money going to be disbursed to AMD for lost business?
No. Why should it? This isn't a civil suit of Intel vs. AMD. Intel is being punished for breaking the law.
EU anti-trust body has become a sick joke.
Why, because they actually do what they're supposed to be doing? You have an odd definition of "sick joke" there.
No - it is still tiny compared to the profits Intel makes.
The chip business is dominated by design costs - the manufacturing cost of each chip is relatively small, even for bigh CPUs. So once you have done the design, the return on extra sales is huge. So you don't want to leave out any significant market.
Also, European companies view business in the US as risky because of tort law: if your component is used in something that causes harm, you can get sued to your underwear even if it is misused.
Consciousness is an illusion caused by an excess of self consciousness.
The EU combined is a bigger market than the US.
I am a free slashdotter. I will not be modded, blogged, DRM'd, patented, podcasted or RFID'd. My life is my own.
Precisely... I'm always amazed to see americans say the same each time there is some EU fine to a US company: "they should just leave EU."
Well, as weird as it may sound, the EU GDP is higher than the US GDP. Many countries there have a higher GDP per capita than the US, too.
He might be talking about the Phenom L3 cache bug.
Under the terms of the sentencing, intel has to stop these practices immediately, or face even more fines. As MS found out when they dragged their heels during their trial. This will hopefully have a much bigger effect than the fine, and could save AMD from extinction.
Japan and South Korea have already found in favour of AMD and against Intel. The USA's Federeral Trade Committee began investigations last June at the request of AMD, but I don't know where they are with that investigation now.
Aide-toi, le Ciel t'aidera - Jeanne D'Arc.
First, read the actual comments made by Kroes respecting the EU's findings. Your above comments are very wide of the mark.
http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/09/241&format=HTML&aged=0&language=EN&guiLanguage=en
HTML entities, learn them and love them. (Slashdot doesn't support all of them)
because of the encoding they use in their html. It is ISO-8859-1 not UTF-8
Since when did /. start letting in non-geeks? :P
Since May 2002, when trolls started abusing bidirectional control characters.
The CPU market wouldn't look anything like it does now if it weren't for Intel strangling the OEM market to prevent AMD market share increases.
When the Athlon was first debuted, it stomped Intel's current Pentium offerings. The supply was there and at a very competitive price, but I believe Intel forced OEM's to stop or restrict sales of AMD based computers. With a truly free market, AMD marketshare should have grown rapidly at that point but didn't.
You can't legislate goodness. Let each to his own destiny, by will of his freely made choices.
Or maybe not, and intel just knew when they withheld the yellow book, they could destroy everyone, because they had such a dominant monopoly, and because it was the right thing to do to maximize profits when you gut no conscience... they went with it.
I'm sorry, but from what I heard from my sources, GP it very believable, if not just the tip of the iceberg. (Because I know for a fact, from own experience, that they forced mainboard manufacturers to either not make AMD Athlon mainboards, or not get any specs and chipsets from them anymore.)
Any sufficiently advanced intelligence is indistinguishable from stupidity.
It is usually a retail shop that gets an "exclusive" on a product. Meaning that Target has something Walmart doesn't.
It is not a manufacturer supplying Target and Walmart at the exclusion of all other manufacturers. That hurts competition.
The "exclusive" you describe is like "Metal Gear Solid" on the PS3 which is not on the XBOX or WII. There is nothing wrong with that since they are not stopping the building of competitive products.
Well, it is 3.84% of their 27.6 billion € revenue,
and 27.25% of their 3.89 billion € net income.
So it's a bit more than a slap on the wrist, and will hurt.
But I agree that 100% of their income would be a better fine.
Any sufficiently advanced intelligence is indistinguishable from stupidity.
They must put the funds in escrow until they have settled their final appeals. The float on $1.5 billion is significant, so they are out something regardless of their final verdict. "The company must write a bank guarantee for the fine right away, though that guarantee is held in a bank account until appeals are exhausted, a process that could take years." ref
fsck -u
Role of the gov's should be to maintain even playing field, not to help any single competitor (and what about Via?)
Besides, one could argue that the ones most harmed by those intel practices were consumers, so the fine has a chance to benefit them in one way or another (yeah, yeah, "that will never trickle down from gov's" - but actually, EU is rather good in this regard; I can see tangible improvements around me after joining (quite recent member state))
Also, if intel will have to somewhat raise prices to recoup the fine, AMD benefits (yeah, yeah, "where's the gain for consumers you were talking about?" - in reality, healhy prices are better than too low, unsastainable ones that would allow killing off competition...at which point intel would get back to pricing practices from the 90's)
One that hath name thou can not otter
Her final words on the official EU statement:
Finally, I would like to draw your attention to Intel's latest global advertising campaign which proposes Intel as the "Sponsors of Tomorrow." Their website invites visitors to add their 'vision of tomorrow'. Well, I can give my vision of tomorrow for Intel here and now: "obey the law".
From: http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/09/241&format=HTML&aged=0&language=EN&guiLanguage=en
Go Neelie!