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Intel Government The Courts AMD Hardware News

EU Slaps Intel With Formal Antitrust Charges 62

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

EU Slaps Intel With Formal Antitrust Charges

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  • AMD.. (Score:3, Interesting)

    by ilovegeorgebush ( 923173 ) on Friday July 27, 2007 @10:28AM (#20010437) Homepage
    Seems like this is a blessing indisguise for AMD...or not? From TFA:

    AMD can use some good news, as the company has fallen from its glory days in early 2006, when the chip maker had passed 20 percent market share. Strong competition from Intel's Core Duo and newer Xeon lines of CPUs have hit AMD hard, and the company continues to lose money despite rising sales: the company reported a $600 million loss last quarter. AMD has high hopes that its purchase of graphics card maker ATI, combined with upcoming Barcelona CPU technology, will be enough to turn the company around.
    Will this have any affect on Intel's stranglehold on the market though? This whole situation is reminiscent of Microsoft and the EU a few years back. Even that barely stopped them. I doubt this'll do much for AMD...much like it didn't do much for Netscape in the browser wars (MS forced to remove IE as the default browser from new Windows installs).

    • Re: (Score:2, Informative)

      by ShamrawkNRoll88 ( 1113451 )
      See, therein lies the issue. The UPCOMING Barcelona CPU technology. Intel is already producing, and is getting ready to move to a 45nm manufacturing process in the first half of next year. Barcelona hasn't even hit shelves.

      And another issue, how much will a Barcelona processor cost when it is released. In my opinion, Intel is fighting tooth and nail to stay on top in this one, including dropping their prices drastically when they release newer processors. And the older processors that are having their pr

    • Re: (Score:1)

      by adsl ( 595429 )
      Wasn't it AMD which just a few years ago said it was going to undercut ALL Intel CPUs prices in a price war which Intel could not match? Seems to me that in the last 3 years, or so, AMD met their match in terms of performance and price. Given this I don't think that Intel will have much of a problem proving their case. Meantime the EU should pay attention to the signals coming from AMD that they may go fabless. Then what happens to those AMD factories in Germany? Meantime Intel has an EU factory presence in
  • In karma we trust!
    • How ironic. I'm using Intel now... in America! And thanks to my Intel Pentium III at 696MHz, I got to this article in blazing speeds!

      But back on topic... how big of a market is Germany compared to the big picture? Even with competing hardware, they shouldn't lose too much considering they probably have a strong grasp on the market there already.

      • How big of a market Germany is? A pretty big one I'd say, with 82 million people living here.
        • Not to mention that if there's 1 country in europe known for its willingness to buy the latest and greatest tech gadgets, it's Germany. From my experience in callcenters I'd say the Germans are on average a lot more tech-savvy than their neighbours...and thus far more inclined to actually keep track of this kind of news and act on it.
        • not only this, Germany has a huge purchasing power (the average german has a high salary).

          And, Germany is (and has been for a long time) the high tech nation in europe. Technological decision made in Germany influence large parts of europe, since many companies need to work/trade with German companies.

          Cheers,
          -S

  • Punishments. (Score:5, Insightful)

    by ushering05401 ( 1086795 ) on Friday July 27, 2007 @10:30AM (#20010471) Journal
    The punishments for such infractions are obviously not high enough. It's not like Intel execs sat down and said "Hey, let's potentially bankrupt our company so we can make a couple extra percentage points."

    It is more likely they looked at previous (MS) antitrust settlements and decided that an anti-competitive strategy was an attractive move for execs and shareholders alike.

    Regards.

    • Re:Punishments. (Score:5, Insightful)

      by Handbrewer ( 817519 ) on Friday July 27, 2007 @10:34AM (#20010521) Homepage
      The worst thing is, you're probably right. The really make it hurt for these multibillion dollar companies, you need to strike with either excessive fines, or - demand responsibility from the management, and ship them to jail. You cant enjoy the money you gained unrightfully if you're in prison. But, this is the whitest of white collar crimes. But the bloke on the street who cheats for 500 euro in taxes, gets punished very hard in comparison.
      • I don't think we as a society have really figured this one out... I believe Dickens had discussions along these lines in most of his work. Maybe someday there will be a way to balance the ability to make laws with the responsibility to make sure they are actually just.
      • Make it hurt for multibillion dollar companies? How? If you give them very large fines, the stock will drop, as all these "investors" will walk away. The execs will come up with a plan to up the stock. Guess what that will be ? Sack some people (give it a nice round number like 10000, always good from a marketing point), and that won't be execs. That will be people in manufacturing, quality, customer support etc so not really good for consumers either... And what about where AMD would be if they had all t

    • Re: (Score:3, Informative)

      by ttnb ( 1121411 )
      The punishments for such infractions are obviously not high enough.

      Yes.. if fact maybe the main problem is a lack of conherence and predictability in antitrust presecution and antitrust judgements. See the paper "The Incoherence of Punishment in Antitrust" [ssrn.com] by S. W. Waller, Chicago-Kent Law Review, Vol. 78, p. 207, 2003.

      It is more likely they looked at previous (MS) antitrust settlements and decided that an anti-competitive strategy was an attractive move for execs and shareholders alike.

      Yes :-(

    • Re: (Score:2)

      by AusIV ( 950840 )

      It is more likely they looked at previous (MS) antitrust settlements and decided that an anti-competitive strategy was an attractive move for execs and shareholders alike.

      But in the case of Intel vs AMD that only works if they can completely squeeze out the competition. Microsoft was able to lock people into MS products by making users dependent on software on file formats only available on Windows. Once they did that, they could charge as much as they wanted and didn't have to be very innovative because

  • We all know litigation really helps innovation, as does vendor lock in.

    I would have to believe that the product is reaching the top of the s-curve (diffusion of an innovation - ie the stock CPU), and has become a commodity, when EVERY transaction becomes about price and no longer about comparison of the technologies. At this point, looks like litigation is the only way to compete - instead of taking the food from your competitor's mouth, you try to bleed them out.

    Or Intel cheated and AMD is just saying "ne

    • Re: (Score:3, Insightful)

      by KarmaMB84 ( 743001 )
      If Intel paid someone not to sell a competitor's product, it's not about competition.

  • FYI: "Market Development Funds" (Score:3, Interesting)

    by asphaltjesus ( 978804 ) on Friday July 27, 2007 @10:42AM (#20010655)
    Depending on how you do it, it's not illegal. But most of the time there is a mixture of legal and illegal MDF usage pretty much everywhere in the world.

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

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

    • Re: (Score:3, Informative)

      by Red Flayer ( 890720 )

      and some more unusual things, some of which are legal in Las Vegas.
      Hmm. Just so you're aware, you need to leave the Vegas city limits for some of those things to be legal. Or so I've heard.

      Just a friendly bit of advice from someone who wouldn't want any Slashdotters to end up in the klink in Vegas.

  • what is fundamentally wrong about it? (Score:3, Insightful)

    by nwanua ( 70972 ) on Friday July 27, 2007 @10:44AM (#20010683) Journal
    Would someone please enlighten me? Is there something legally or morally wrong with two independent companies agreeing to what seems to amount to a partnership? The retailer obviously benefits from the agreement, otherwise they wouldn't have signed up; so does Intel. The argument is that Intel paid kickbacks of sorts, but what if these had simply been in the form of discounted CPUs?

    Back in the day, there were stores that would sell only Apple equipment and related peripherals. I don't know if they signed any exclusive deals, but I don't recall any noise about that. Yes Intel is huge, making it vunerable to charges of monopolistic tendencies, but what is it about this case that makes it fundamentally different from any sort of exclusive agreements?

    Consider: I might want to sell only cheese from a certain company, and discounts (kickbacks if you like) might make that choice even sweeter. What's wrong with that? Why do I have to sell anybody else's cheese? And why do the cheese manufacturer and I have to be punished?
    • Nothing, if you're not a monopoly. Monopolies are also not illegal. Abusing them to squeeze out legitimate competition is though.

      Intel abused their position to bully/pay off companies to not sell AMD gear, not because the AMD gear was inferior, or less desirable. That's counter what a free market should look like and is bad for everyone. It lets Intel slack off [re: Pentium 4] and sell things for ridiculous prices [re: Pentium 4].

      Nowadays though things seem to be better, Intel has better tech than before and they're selling them at fairly competitive prices. But that doesn't excuse their behaviour earlier. Who knows where AMD would be today if they had more funding for research from sales that were denied them?

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

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

    • Re: (Score:2, Insightful)

      by Zero Degrez ( 1039938 )
      Part of having a free market is that the CONSUMER is the one that gets to make the choice. That is, per your example, Apple were extremely popular amongst the consumers, then stores would stock more apple equipment to meet the demand made by the consumers. However, if per your example, Apple offers kickbacks to the store to only stock their equipment so that consumers are forced to purchase the Apple brand, then it is no longer a free market where the consumer makes the decision on what products will succ

    • Re: (Score:2)

      by Ozan ( 176854 )
      Is there something legally or morally wrong with two independent companies agreeing to what seems to amount to a partnership? The retailer obviously benefits from the agreement, otherwise they wouldn't have signed up; so does Intel.

      By that logic bribery wouldn't be wrong as it benefits the briber and the bribee.

  • Official links (Score:4, Informative)

    by Dekortage ( 697532 ) on Friday July 27, 2007 @10:54AM (#20010841) Homepage

    Read 'em yourselves: EU's official statement [europa.eu] and Intel's official response [intel.com].

  • Intel says its actions actually benefit consumers (Score:3, Informative)

    by thefickler ( 1030556 ) on Friday July 27, 2007 @10:56AM (#20010875) Journal
    Intel's senior counsel has responded to the EC's preliminary finding by saying that the Intel's actions in Europe actually benefit consumers. http://tech.blorge.com/Structure:%20/2007/07/27/in tel-were-not-abusing-our-market-position-in-europe / [blorge.com] But then, of course, they would say that.

  • Monopoly: AMD can't even give chips away. (Score:5, Interesting)

    by Visaris ( 553352 ) on Friday July 27, 2007 @11:01AM (#20010943) Journal
    Comments by AMD's Hector Ruiz really struck a cord with me:

    www.cbronline.com [cbronline.com]

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

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

    • Re: (Score:1)

      by ucla74 ( 1093323 )
      I wonder if Ruiz would be willing to repeat that, word for word, in court, under oath. (Hint: Look up "dumping.")
    • There was a time when you couldn't give me an AMD chip. I had been burned badly by VIA and AMD motherboards (who were the only chipset makers at the time for Athlons) in a couple cases and I just wouldn't use them. Sorry, but I expect more reliability out of my personal and especially professional systems. I could see a computer maker feeling similar. Obviously free processors would only be a short term teaser, and if the damn things are going to be nothing but problems, well then who wants them?

      I'm not say

  • The courts allege that Intel made at least one arrangement in Germany to ensure that PC manufacturers could only use their products.

    Well, that's a typical licensing agreement: you only get a license to use their products, not possess them.

    Oh, you meant Intel said the PC manufacturers could only use their products? I read it with implied emphasis on "use" instead of "their".

    So the PC manufacturers can only use their products, not Intel's products? Well, is Intel obligated to sell to anyone who can pay? Or am I confusing not only the emphasis but also the pronoun association?

    • And that is exactly what is illegal in EU.

      Why? Because it ultimately hurts the people and the people are paramount. In USA , corporations are paramount. People are just a nuisance and should not interfere with corporations ability to reap profits.

      In USA, people fear the government, in EU, the government fear the people.

      • In USA, people fear the government, in mainland EU, the government fear the people.

        Fixed.

        I know there's no such thing as "mainland EU", but as someone living in the UK, I'm not allowing you to complement our country as such. I mean on the current topic, the consumers do seem to be protected more than in the US (BBC Watchdog just humilliates any company who breaks the law), but the fear seems to follow the USA model.

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