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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."
Without knowing exactly where it goes I can only speculate, but could this fine by so high to help fix European budgets stretched too thin by a weak economy?
The musings of just another geek and his junk.
I was the Director of Engineering for VLSI Technology's PC Chip set division back in the 80's. Back in those days, there were dozens of companies making chip sets for Intel CPU's and Intel, surprising as it may sound, did not. The chip set business was interesting in that it started with C&T. Zymos was second and VLSI was third. By the time we got into it, and in particular, after we were picked by IBM to be their chip set provider, the bay area VC market must have been swamped with business plans of every dog and his brother wanting to start a chip company making chip sets. If you can remember too, there were hundreds and I do mean hundreds of PC companies. Fast forward a few years. Things are now pretty crazy. VLSI made it to be the top chip set supplier but the competition was intense. The hundreds of PC companies has now fallen to around 10-12. The dozens of chip set companies has fallen to 4 or 5 but still no Intel. This is around the time that the Pentium first made its debut. Now, to make a chip set, you need these very important things called "Yellow Books" ( maybe they were Red.... hmm that was a few years ago) . These are the specifications of the next CPU from a "certain" CPU manufacturer. Without the yellow books, you can't make a chip set because you have no idea what the memory interface is going to look like. If you don't know the memory or peripheral interface you can't make a north bridge for sure and your south bridge is going to be a hack. Soooooo, it was at this time that we were working on our next generation chip set for the Pentium. We were going crazy because, for some very strange reason, we had yet to get the "Yellow Books". We could and did make educated guesses as to what the memory interface should be but we did not know for sure what it would look like. Well you know what? Gee, like magic, Intel announces and samples their Triton chipset. (Which we taught them in large part how to make pursuing a CF called Polar and Draco with Intel, but that is another story.... I digress) And Andy G. tells the press how Intel was just "forced" into making their own chip sets because the external chip set vendors just could not keep up. Oh yea, gee wizzz, we get the specs the same week you sample and yea, we just can't keep up can we. Where it really got interesting is when we got our chipset out and our sales team was trying to sell to our customers, which now as I said is a VERY short list, it seems a certain "I" company was bundling their chip sets with their CPU's. You, as a PC company, "could" buy just CPU's from them for price A or you could buy CPU's + Chip set for price B. I let you guess which was the larger. Oh, yea, and if you selected the A option. They ( the "I" company) could not guarantee delivery.
So, we went from $250M/year in sales to $25M/year in sales in 12 months. Our division was decimated. I have never seen anything, short of last Octobers stock market, fall so hard and so fast.
In retrospect, I don't blame Intel for getting into the chip set business. Hell, I am surprised actually it took them as long as it did but both the tactics they used, and quite frankly, the stupidity of the upper management at VLSI laid waste to an incredible group of people, and at the time, a great place to work. Ah, well. That's competition. It was fun while it lasted.
"TV, a medium as it is neither rare nor well done." Ernie Kovacs
2 Euros (why does Slashdot not display the Euro sign correctly when pretty much every other internet forum does?)...
The AACS key is NOT 0xF606EEFD628B1CA427BEA93A9CA9773F
I see nothing wrong with it... it is already rather appealing.
The action against Microsoft does not seem to have hindered Microsoft's behavior in the slightest and so even though tremendously more aggressive than the action against Microsoft in the U.S., it was clearly not enough.
It remains to be seen if the action against Intel will be at all effective.
That was funny in 1993. Back in 2007, I bought 400 AMD CPUs with a design flaw in every chip.
Fortunately, we use Linux and there was a software patch for the hardware CPU error just like there is a patch in Linux for the Intel floating point bug.
If we ran a propriatary OS, we would have been out of about $1 million.
It's not even the maximum amount they could have fined them! The max amount is 10% of annual company revenue, for Intel that would be just below 4 billion Euros., since 2008 revenue was 37 billion
And no, they cannot state that paying that fine would bankrupt them, since they have an estimated 10 billion in cash and securities.
Or so states The Financial Times.
"The Commission finds that Intel did not compete fairly"
Not to be too harsh about it, but has ANY company ever really "competed fairly"? It seems to me that if you're playing fair, you're usually not really competing (not in the top tier anyway). Sure, there are great companies like Canonical who are playing fairly in the OS market, for example, but are they really "competing" when the much more cutthroat Apple and MS consistently control 99% of the OS market and shut them out of every mainstream retailer? Sad as it is to say, you almost HAVE to play dirty to "compete" in any real sense. I certainly bet a lot of clean professional athletes must have felt that way when they saw guys like McGwire, Bonds, etc. knocking them out of the park while they struggled.
SJW: Someone who has run out of real oppression, and has to fake it.
(European companies will get a free pass, of course).
Like EDF, Groupement des Cartes Bancaires, or Telekomunikacja Polska and Slovak Telekom are then?
From what I understand, the way it was done was subtler than that. "We estimate you need 100k pens, so if you buy 90k+, you buy at discount". "Oh, you need 50k pens? We'll offer a discount starting at 45k purchases". Essentially, they never explicitly say "you can't have more than 10% of your stock in AMD products", but, by tailoring their bulk prices on a per-client base, they effectively achieve the same effect.
The fine is 4.5% of Intel's total revenue. Hardly meaningless. That said, since you seem to think a fine isn't the answer, suggest an alternative. Really. Give us some other way to make sure Intel doesn't fsck the market again.
I hope they do. Apparently the US is doing a shit job to prevent anti competative behaviour like this. It's nice to know the consumer in EU is still worth more than shit. I for one welcome AMD back into the game that Intel stole .
I am the lawn!
Intel currently makes more money in Europe than it does in the US? ...and has more employees outside the US than in it ... it is only nominally a US company?
Puteulanus fenestra mortis
In this scenario, the EU must take care to ensure that Intel's only other serious competitor, AMD, be given a fair playing field in which to compete. The multi-billion-dollar (trilion-dollar?) computing market ranging from netbooks to tower-stations depends on getting the best processor bang for the Euro.
South korea has already fined intel for the exact same crooked behaviour recently. eu is even late in doing it.
Read radical news here
So it sounds like AMD doesn't get a cut of the EU's Intel fine.
But does the finding of fact in the EU's ruling pave the way for AMD to nail Intel with some kind of civil suit?
South Korea fined them a "whopping" $25 million, Intel managed to talk its way out of a fine in Japan as long as it promised not to do it anymore.