Intel Could Face 1.3 Billion in Fines at the Hands of the European Union
Intel Could Face 1.3 Billion in Fines at the Hands of the European Union
Posted 05/02/2009 at 5:14pm
| by Justin Kerr
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Let it not be said that the European Union is playing favorites when it picks on Microsoft. The powerful antitrust regulators have now set their sights squarely on Intel, and the fines could be much worse. The commission began investigating Intel’s sales practices in late 2000 when AMD filed its initial complaint. Both chip makers are US based, but European regulators are historically much more aggressive at punishing monopolistic behavior than their American counterparts.
The chip maker has allegedly been accused of giving large rebates to computer manufacturers and retail chains to carry Intel exclusively, or in some cases, to downplay the AMD offerings. In some situations, Intel is even accused of offering server chips below cost to help corner the market. Intel denied any wrong doing and according to Intel spokesmen Robert Manetta, “Over all, Intel’s conduct is lawful, pro-competitive and beneficial to consumers.” Intel has every right to be concerned over the investigation however, since the fines imposed are rumored to dwarf those faced by Microsoft. In the 2004 EU antitrust verdict against Microsoft, the software giant faced a fine of close to $663 million US. Intel on the other hand could be facing a penalty of $1.3 billion or more according to experts.
Intel currently controls around 81.9 percent of the global market for CPU’s, while AMD scrapes by with only 17.7 percent. A guilty ruling could put Intel into further hot water after being found guilty of anti competitive practices in South Korea less than a year ago. They are appealing the $19.5 million fine, but this is chump change compared to the $3.6 billion penalty the European union is capable of leveling.
Is Intel abusing it’s power?
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concernedITpro
May 11, 2009 at 9:00am
It's nice to see that some governments (EU) have the backbone to go after corporate giants that engage in corrupt practices. Though I have no research in this particular instance, my gut tells me that the lobbying on the domestic front has made many of our elected officials look the other way when Intel, or any other powerful lobby, entreat to engage in practices which are questionable or outright illegal.
If Intel is breaking the law in the EU then they need to be slapped down and slapped down good.
It is unfortunate that a stinging fine/settlement will probably increase the price of our CPUs somewhat as a result. But I am convinced that if Intel ran unchecked and ran AMD out of business, then we'd be paying an even higher price for our CPUs than any fine would have effected.
Just think how much of the current global economic crisis would not exist if the world's corporations ran a clean game, whether business-to-business, business-to-employee, business-to-government, or business-to-customer.
The Concerned IT Professional
mesiah
May 05, 2009 at 12:03am
Honestly, wether or not it is a monopoly should not be for the EU to decide. If one US company wants to bring an antitrust suit against another US company, then it should have to be in the US. Here in the United States we have a little thing called jurisdiction. One EU company shouldn't be allowed to bring a suit against another EU company in some third world country just because they want to see the CEO executed in front of a firing squad. Yes, both companies DO make profit in the EU but they are based here, so the EU should let us handle our own business and we should do the same. You can argue all you want about who is high and mighty, and who is right and who is wrong, but I think we should all agree to keep our noses out of eachothers business. And thats my $0.02 :P
periodhyphenund...
May 09, 2009 at 6:11am
The EU has jurisdiction over Intels Monopoly in Europe!
They are NOT going after Intel here in the U.S.
Get a Clue
Deanjo
May 05, 2009 at 4:45pm
" Here in the United States we have a little thing called jurisdiction."
You also understand that your "juristiction" allows for the exact same thing that the EU is doing. You break a law in their state you face the states laws and rights as well as any federal laws and rights. Don't believe me? Read any warranty as an example. You do business in those area's you are subject to their laws. If I'm a visitor to the US and I commit a crime while there, am I not subject to their laws? If not I'll be heading over to the US to hold up some banks.
MeTo
May 05, 2009 at 10:28am
If you wan't to sell in somebody else's country you have to do it by there laws. If you don't want them sticking there nose in your business keep out of there's.
Linux Mint,AMD Athlon+ x2 5600,3 Gig ram,500 Gig HDD,ATI 1300 Video.
mesiah
May 06, 2009 at 12:35am
While I agree that the EU should have jurisdiction over the things being sold in their country, it should be limited to Imposing fines for unfair business practices. NOT an anti-trust suit. Yes, if you come to the united states and break a united states law, you are responsible for it. But an anti-trust suit goes beyond penalizing a company for mere actions against another and investigates right down to the core of a companies business. And that kind of practice should be avoided. Impose fines for unfair business practices and move on.
Deanjo
May 06, 2009 at 2:14pm
If that business has operations in those countries then they are subject to all laws in which they operate which includes intel. If they do not want to abide by those rules then suffer the consequences or get the hell out. Much like apple did in France and other countries.
gatorXXX
May 04, 2009 at 2:11pm
I kinda hope intel gets the crap smacked out of em. Core i7 might be better than the phenom II but who cares? Good performance at a much cheaper price for ME is the way to go. Besides....Core i7...the "i" has me disturbed. Soon it's gonna be....
Core i7 procs on a shiney new iMobo with iRam and an iGPU in a new iCase with killer iperipherals using an imouse, ikeyboard, and stellar iheadphones all surrounded with iaccesories such as an iphone, ipod, idock with an iradio using icables sitting in the new ichair eating an ibigmac and ifries slurping on an icoke watching an idvd called irobot. WHEW......
sreesesr
May 09, 2009 at 2:14pm
U.S. Army Sergeant
That is the funniest thing that I have read in a LONG time!! Just like in the movies where everything in the future is made or owned by Intel. I totally agree with you and if you have followed the trends of AMD and Intel over the last 20 years, AMD has always made a comeback. Besides, Cray Supercomputers still use AMD, that's a good thing right?
gatorXXX
May 13, 2009 at 2:42pm
It's always a good thing to see anything going AMD's way!! Thanks for the compliment and God bless our U.S. soldiers!
Sonickid101
May 03, 2009 at 12:48pm
Gotta keep these companies on thier toes to ensure fair prices for the consumer and keep Intel from doing something too evil.
MeTo
May 03, 2009 at 11:46am
Let's see they made 100's of billion's of dollars and get a 1.3 billion dollar fine that's a big profit margin.
Linux Mint,AMD Athlon+ x2 5600,3 Gig ram,500 Gig HDD,ATI 1300 Video.
jihnn
May 03, 2009 at 6:15am
what i just read was an artical about a large company possibly using unfair practices to keep another out of a market.
if intell is actually selling parts for less than cost and using pressure and bribes to get retail outlets to badmouth or just not carry amd produts. we should all be alarmed!!!
you fanbous should take heed....IF INTELL RUNS AMD OUT OF BUSINESS the cost of your midrange computers will skyrocket.
if you are buying a $500/700 computer amd is a valid choice. around here the shcools require parents to supply a home computer, without amd, i'm sure we would be spending more.
Seana7a7
May 03, 2009 at 2:49am
Intel operates in the EU so they are bound to EU law, the majority of intel chips you buy in the EU are produced in the EU. Intel maybe american owned but they will have to act like a european comapany if they want to do business in the EU. From the other comments i've read americans seem to think they rule the world and can do anything they like without consequences.
The EU is Intels biggest market so if they don't pay the fine their gone, the population of the EU is around
500,000,000 while the US is about 300,000,000.
Zachary K.
May 03, 2009 at 12:38am
its not intels fault if everyone just likes intel more than AMD. the EU needs to stick to europe insted of attacking american companies. who needs europe anyway, all they do is start wars.
Deanjo
May 03, 2009 at 6:42am
Oh please, quit trying to make this an "everybody hates us americans" bullcrap. It's more like a case of "The US won't sh*t to intel because they are in the old boys club". When it comes to business practices intel is one of the most corrupt companies around. Just a few highlights of shady crap they have pulled off in the past.
1) Telling Asus to bury the existence of the first available Slot A board, the K7M
2) Getting Dell and others to spread unsubstantiated FUD against AMD despite amd having the better, faster, chip in the past. Seriously, why do you think Dell finally started selling AMD's as well only after the latest anti-trust lawsuit was put in place. Again internal documents prove this to be true.
3) In 1991 AMD filed a smaller antitrust suit against intel and it won that one too.
4) Forcing MS to lower the requirements of video to become "Vista capable"
5) Trying to kill the competition with all of a sudden saying "the agreement is no longer valid towards our new product". They tried this againt Via, and lost. They are now trying to do it again against Nvidia and will lose again as well.
...this list goes on....
I can only applaud the companies like Apple who have the balls to say to intel "your stuff is crap so we are switching venders" (in reference to switching to NV chipsets.)
"who needs europe anyway, all they do is start wars" If you were to look at the individual countries you would see that the US has been involved in a far greater amount of wars then any one individual country since the US's inception. It takes two opposing factions to start a war. A majority of the wars since then has been US vs XXX. But I would expect no less of a "chest thumping arrogant response" from a citizen of a country that did not even recognize equal rights of races until the mid 20th century and still until this day does not have provisions in it's constitution guaranteeing equal rights of sexes.
http://en.wikipedia.org/wiki/Equal_Rights_Amendment
Carbon
May 02, 2009 at 7:43pm
Where does all this free money that the EU is getting go?
If you can't make something better, sue the others and take their money!
So Lame!
brooklynboy
May 02, 2009 at 7:41pm
The only thing that has kept prices low on CPUS has beeen the competition
between Intel and AMD, when you go to the major OEM makers (HP, DELL etc)
and say I will give you this deal if you only carry my CPUS that is illegal, it is
called restraint of trade. To offer an exclusive area of distrubtion is something else,
coke or pepsi do not say you can't carry the other's product just you can't carry it
in the coolers they give you for their product. What has happened is that intel has
made a marketplace that is very hard to crack, your product has to be a Lot better
not just as good to get any sales. I remember the Athlon VS P3 days when the AMD
chip was faster,cheaper and used less power , Dell did not offer it on any machine
why was that ? these field leveling investigations are a long time in coming and will
be a long time in settling.
Cyberdiver
May 02, 2009 at 8:08pm
Athlon vs P3? Maybe p4.I dont think intel was building many p3's when athlon came along.
Deanjo
May 03, 2009 at 5:26am
Actually it would be you that is wrong. The athlon started back in the P3 days. Slot A vs Slot 1. First athlons debuted June 23, 1999 and it's direct competitor was the P3's. P4's didn't come out until a while later. Best read up on your processor history.
http://en.wikipedia.org/wiki/Athlon
http://everything2.com/index.pl?node_id=1362904
jwalch.hawk
May 02, 2009 at 6:43pm
The phrase "allegedly been accused of" doesn't read very well.
Anyway, to the point: I don't feel Intel has engaged in anti-competitive practices, though I certainly don't have the perspective to know on the server market-related allegations. As far as the OEM things go, I'm a bit lost. Usually you have to give something to get someone to vend exclusively your product. Coke/Pepsi have been negotiating contracts like this for years - they'll offer some sort of discount or lump sum and then the place has to sell exclusively that brand for X time. I guess it's a little different when it comes to these large international companies. **shrug** In any case, for the small market share AMD has, I don't think Intel has really done anything ridiculous in terms of bullying them around unless you want to count the fact that i7 has basically allowed them to force AMD out of the high-end for a while.
Jesterace
May 02, 2009 at 6:27pm
I'm an AMD user as well, I prefer to purchase AMD, a monopoly? naw, I don't think so... I mean all my desktop machines run AMD, always have and will until they're no more. Although my laptop and netbook both have intel processors.
gatorXXX
May 02, 2009 at 5:35pm
Well, if it's true and they find them guilty, then I guess it's not BS now is it?
sasquatch42
May 02, 2009 at 5:31pm
the EU has no cash
monopolies have cash
EU acts like they don't like monopolies to get cash from monopolies
dc10ten
May 02, 2009 at 5:23pm
I use AMD chips. intel is not a monopoly, they are being competitive. This is pretty much BS
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