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Intel Faces $1.3B Fine In Europe

kdawson posted more than 5 years ago | from the not-to-be-outdone-by-microsoft dept.

Intel 280

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."

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First? (0, Offtopic)

not already in use (972294) | more than 5 years ago | (#27774011)

Now that's what I call a sticky situation.

Intel AMD (0, Troll)

DirtyCanuck (1529753) | more than 5 years ago | (#27774013)

It's not Intels fault they kick so much ass :O

Re:Intel AMD (2, Funny)

Spatial (1235392) | more than 5 years ago | (#27774105)

It isn't? I wish I could kick that much ass by accident...

Plunder (0, Troll)

Arthur B. (806360) | more than 5 years ago | (#27774043)

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.

Cue the brainwashed anti-trust crowd.

Re:Plunder (1)

theArtificial (613980) | more than 5 years ago | (#27774225)

It's not like these laws were put into place recently. Don't forget your foil hat.

Re:Plunder (1)

cyber-vandal (148830) | more than 5 years ago | (#27774331)

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.

Re:Plunder (-1, Troll)

an.echte.trilingue (1063180) | more than 5 years ago | (#27774535)

Is the EU even a government?

That depends who you ask. The functionalists would say yes, the realists would say no and the constructivists would say sort of. Theorists of multi-level governance would say that the whole concept of a sovereign state is over and done with but most of us have yet to realise it.

Also, it is true that fines are a significant portion of the EU's small budget.

That's perverse, isn't it? (2, Interesting)

dfenstrate (202098) | more than 5 years ago | (#27775193)

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.)

Re:Plunder (2, Insightful)

an.echte.trilingue (1063180) | more than 5 years ago | (#27774399)

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"

Re:Plunder (3, Insightful)

macraig (621737) | more than 5 years ago | (#27774537)

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.

Re:Plunder (1)

MrMr (219533) | more than 5 years ago | (#27774777)

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.

Ouch! (5, Insightful)

Spatial (1235392) | more than 5 years ago | (#27774089)

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.

Re:Ouch! (-1, Troll)

jellomizer (103300) | more than 5 years ago | (#27774355)

Yes Selling Good Quality Equipment for a low cost is really a bad thing, they should be punished for this.

Re:Ouch! (5, Insightful)

reashlin (1370169) | more than 5 years ago | (#27774495)

The problem is not intel selling high quality goods for a low price. The problem is intel using their size and market dominance to threaten retailers into not using competitors products. Intel have been ensuring by force that AMD are not even getting a chance to hit "shelves" with their products. That really is a bad things for everyone.

Re:Ouch! (5, Insightful)

Sunshinerat (1114191) | more than 5 years ago | (#27774827)

Exactly, when Intel finally pushes AMD out of business, the practice of selling server class hardware below market will no longer continue. The loss will be recovered, this time by one single vendor.

We have seen this before, however, an open source chip maker producing free chips is not so likely. That is why Intel must be kept in line.

Re:Ouch! (-1)

ShieldW0lf (601553) | more than 5 years ago | (#27775101)

We have seen this before, however, an open source chip maker producing free chips is not so likely. That is why Intel must be kept in line.

No, but we might see tools brought to the people that will let them manufacture their own. For example, the RepRap project, while far from having a tool that can manufacture chips, could in theory be advanced until it is capable of doing so.

It's not like computer chips require expensive materials to manufacture. They're made of the cheapest stuff on earth. Hell, if a government that isn't motivated by profit and leverage were to seize one of those fabs, they could use them to make hundreds of chips for every man, woman and child on earth. The scarcity only exists because we allow them to shut the things off and hold them over our heads like carrots to make us jump.

Damn that would be awesome...

Here's a bucket of sand (0)

Anonymous Coward | more than 5 years ago | (#27775243)

Please make a CPU for me. Let me know when you're done.

A RepRap could in theory be advanced enough to do it. Yeah, and I could be advanced enough to shit gold.

This is one of my biggest pet peeves about the 'self-replicating' bandwagon. I'll be dead and buried before a RepRap can make a copy of itself from raw materials.

Re:Ouch! (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27774899)

So says the EU.

Some of these fines lately just seem like a money grab by foreign countries to me. How many of the companies from the EU are violating anti-trust laws here? Maybe those should be pursued and fined as vigorously...

Re:Ouch! I'd like to mod you up, but i think (-1)

davidsyes (765062) | more than 5 years ago | (#27774365)

I first want to say, I bet intel will compute with as many threads as HQ can to get out of paying this fine, or at least they'll compute like hell to reduce it.

Incidentally

In my:

http://slashdot.org/comments.pl?sid=1214651&cid=27761197 [slashdot.org]

i had your sentiment (i think), and someone (no, TWO ppl) got high marks for parroting the separation of profit-making from morality...

"Why is it so hard for some people to believe that Apple isn't this wonderful non-profit business with only intentions of making the world better? They are a for profit business, like the rest of them, with profit as the bottom line. They sell products to make money. That is all. Some people like their products better than others. But don't equate the products they sell with how they run their corporation."

If I had mod points, I'd mod you to 4 or higher. But, i guess, the way things are around here, i'll get downmodded, and if you get upmodded, someone will snatch it away from you.

This is all just speculation (1)

sofar (317980) | more than 5 years ago | (#27774531)

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.

Is there any point? (3, Insightful)

AnalPerfume (1356177) | more than 5 years ago | (#27774107)

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.

Re:Is there any point? (2, Insightful)

paziek (1329929) | more than 5 years ago | (#27774163)

And suddenly their chips aren't so good in comparison to AMD. Yes, there is a point.

Re:Is there any point? (1, Interesting)

Anonymous Coward | more than 5 years ago | (#27774215)

AMD already has more bang for your buck. Intel's only the best at the top end and even that's questionable when you look at how many benchmarks are forged. Do your own and you'll find they're a lot closer than you think.

Re:Is there any point? (0)

Chatterton (228704) | more than 5 years ago | (#27775057)

Actually AMD is just behind Intel for the bang for the buck course since 1 year. I hope they wiil get back as I am a big fan of AMD chips.

Re:Is there any point? (1)

billcopc (196330) | more than 5 years ago | (#27775007)

That depends. There are some of us, many former AMD fanboys, who today refuse to buy AMD after a series of failures in performance, quality control and chipset support. This coming from a guy who was damn proud of blowing a chunk of cash on an Athlon FX chip back in the day, and then again when the X2 was launched.

Today's AMD products share the name but not the legacy. Sure, they're cheaper than Intel's offerings, but there are those of us who want/need more than the bargain SKU, and that's where Intel breaks away from the rest.

Monopoly issues aside, Intel must still be making a profit despite "throwing money away" for these bribes or price dumps or whatever they're accused of - otherwise they wouldn't be doing it. That means the are indeed able to compete on price, which suggests their products aren't so out-of-whack with the market as you seem to imply.

Re:Is there any point? (4, Insightful)

JustinOpinion (1246824) | more than 5 years ago | (#27774425)

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.

Yeah that's the point.

Intel have been able to keep their market share artificially high by abusing their dominance. This has made it difficult for other companies to compete. If Intel is forced to raise prices to cover the fines, then this gives other companies the chance to gain market share by competing on price.

In other words, the fine restores some amount of competition, as intended, and serves as a deterrent against continuing to abuse dominance, as intended.

Re:Is there any point? (-1)

Anonymous Coward | more than 5 years ago | (#27775297)

this is a load bs... if a company can afford to lower its price while others cant its the other company's problem. IF they cant get good materials for lower price like intel does then once again the only one to blame is the dumb ass on the other company's. I for one encourage intel to keep there low price, and offer great quality products like they do at the moment!

Re:Is there any point? (0)

Anonymous Coward | more than 5 years ago | (#27775355)

Wow. That's quite possibly the dumbest thing ever posted here on Slashdot.

If one company is too successful it's ok to fine the hell out of them so their competitors can have a go at them?

I'm guessing you voted for Obama (or, if you're not a US citizen, you would've)

Re:Is there any point? (2, Insightful)

Gat0r30y (957941) | more than 5 years ago | (#27774473)

Fines don't seem to be particularly good - breaking up market collusion and creating a more competitive marketplace would seem to be the goal. I'm no economist but it would seem to me that breaking up giants like Intel into many smaller companies could be more effective - but the crux of this seems to be that the R&D at this point is all toward smaller lithography processes. With only two major players in this market there is still significant incentive to invest in R&D but with more players it might be hard for each company to justify the massive costs of producing newer/better/faster processes.

Re:Is there any point? (2, Insightful)

Explodicle (818405) | more than 5 years ago | (#27774799)

it would seem to me that breaking up giants like Intel into many smaller companies could be more effective

The EU doesn't have the authority to break up a US-based company. Fines are one of their few options.

Re:Is there any point? (1)

xouumalperxe (815707) | more than 5 years ago | (#27775049)

Sadly, the biggest deterrent of them all -- locking the culprit out of doing business in the European market -- would only tip the scales so far towards AMD that it's not even funny. Which is why even two competitors is not nearly enough for a healthy market.

Re:Is there any point? (1)

Gat0r30y (957941) | more than 5 years ago | (#27775153)

A valid point. If only regulators in the US had balls.

Re:Is there any point? (1)

MrMr (219533) | more than 5 years ago | (#27774895)

breaking up market collusion
That of course is not something the EU could do with an US based company.

Re:Is there any point? (5, Insightful)

samwise668 (1384025) | more than 5 years ago | (#27774795)

As an european i'd say let the europeans benefit from the fines if the US is not interested in punishing those who broke the law by abusing their monopoly.

WTF EU (0, Troll)

0racle (667029) | more than 5 years ago | (#27774127)

abusing its dominant position in chips by giving large rebates to computer makers, ... and by offering chips for server computers at prices below actual cost

In what alternate dimension does the EU exist where the above are illegal? Because AMD isn't large enough to do the same they get to have the EU demand minimum prices on processors?

Re:WTF EU (5, Informative)

BlueParrot (965239) | more than 5 years ago | (#27774315)

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.

Re:WTF EU (0)

Anonymous Coward | more than 5 years ago | (#27775047)

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.

That's not what Intel did. Intel offered substantial discounts and/or rebates to major OEMs which were contingent upon the OEM buying nothing but Intel. They were still making a healthy profit on these deals, but they definitely were throwing their weight around to keep AMD out of certain markets.

The funny thing is, I wonder if they wouldn't have been better off just slashing prices. Intel has some rather substantial manufacturing cost advantages over AMD (basically, they're big, plus they have some of the best high volume manufacturing expertise in the chipmaking industry), so they can actually make profit at prices where AMD would be losing money.

Re:WTF EU (5, Insightful)

erroneus (253617) | more than 5 years ago | (#27774317)

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.

Re:WTF EU (3, Funny)

DomNF15 (1529309) | more than 5 years ago | (#27774483)

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.

Re:WTF EU (1)

jabjoe (1042100) | more than 5 years ago | (#27775491)

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.

Re:WTF EU (0)

Anonymous Coward | more than 5 years ago | (#27774557)

Fair enough. Intel should be fined by the amount of profit related to this. Wait... those were negative profits.

Re:WTF EU (0)

sofar (317980) | more than 5 years ago | (#27774647)

Giving discounts does not necessarily constitute "dumping.

Has anyone shown that hardware was sold below "production cost", whichever vague definition that might even possibly have?

Re:WTF EU (1)

Myji Humoz (1535565) | more than 5 years ago | (#27774377)

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?

Re:WTF EU (5, Insightful)

m.ducharme (1082683) | more than 5 years ago | (#27774385)

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.

Re:WTF EU (5, Insightful)

Red Flayer (890720) | more than 5 years ago | (#27774423)

In what alternate dimension does the EU exist where the above are illegal? Because AMD isn't large enough to do the same they get to have the EU demand minimum prices on processors?

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.

Because AMD isn't large enough to do the same they get to have the EU demand minimum prices on processors?

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.

Re:WTF EU (3, Insightful)

Ecuador (740021) | more than 5 years ago | (#27774445)

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?

Re:WTF EU (2, Insightful)

Timothy Brownawell (627747) | more than 5 years ago | (#27774545)

abusing its dominant position in chips by giving large rebates to computer makers, ... and by offering chips for server computers at prices below actual cost

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 [wikipedia.org] which tends to be illegal.

Re:WTF EU (1)

Turzyx (1462339) | more than 5 years ago | (#27774547)

It is actually called predatory pricing [wikipedia.org] - 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.

Re:WTF EU (1)

xouumalperxe (815707) | more than 5 years ago | (#27774977)

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.

Re:WTF EU (0)

Anonymous Coward | more than 5 years ago | (#27774673)

Uh, yeah. The laws are a more stringent if you are a monopoly. If Intel wasn't a monopoly than those type of practices wouldn't be illegal.
http://en.wikipedia.org/wiki/Monopoly#Law

Re:WTF EU (2, Interesting)

jabjoe (1042100) | more than 5 years ago | (#27774711)

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.

Anticompetitive? (0)

Seakip18 (1106315) | more than 5 years ago | (#27775089)

Well, the article doesn't outline it and I don't feel like searching.

I guess since Intel may have paid computer companies to simply ignore using AMD components or avoid launching AMD-chip lines.

The thing that rubs me against this though is this...

Following an anti-trust investigation of Intel launched six years ago, the Commission sent a list of complaints to the company in July 2007, accusing it of offering "substantial" rebates to computer makers that mostly used its chips.

So....Intel cuts prices to makers who use their chips, reinforcing the belief they should keep business with Intel.

I'm all for Intel getting a comeuppance ...but this badly?

Socialism (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#27774137)

This is what socialism gives you.

Intel has to pay for its own success.

Re:Socialism (1)

cyber-vandal (148830) | more than 5 years ago | (#27774395)

It's socialist to require large companies to obey the laws in places where they do business?

Re:Socialism (1)

IdleTime (561841) | more than 5 years ago | (#27774599)

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.

Re:Socialism (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27774487)

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.

to be fair... (1, Insightful)

advocate_one (662832) | more than 5 years ago | (#27774161)

the money should be going to AMD who suffered from Intel's actions, not the coffers of the EU beaurocracy...

Re:to be fair... (1, Interesting)

all5n (1239664) | more than 5 years ago | (#27774431)

Entitlements cost money, you know.

It's a smart move, really. Go after successful foreign companies with the cash and avoid raising taxes at home.

Think of this as a tariff that is not regulated by the WTO.

Re:to be fair... (0)

Anonymous Coward | more than 5 years ago | (#27774633)

Capitalist, uberpolluting, trigger-happy, Amerinazi pig.

Re:to be fair... (1)

pseudonomous (1389971) | more than 5 years ago | (#27774627)

That was my thought exactly; if Intel still kills off it's main competitor (and a lot of people seeem to think they might), what's the point of levying a fine agianst them?

Re:to be fair... (-1, Troll)

BasharTeg (71923) | more than 5 years ago | (#27775077)

Yeah, this is just another European Union money grab from a major multi-billion dollar American company. First Microsoft, then Intel. What's next? Maybe they can try to fine Caterpillar or Boeing.

There's no legal justification for Europe issuing BILLIONS of dollars woth of fines. It is just the new way to evade the WTO and tax/tariff the American companies. These kinds of anti-trust claims should be moved under the umbrella of the WTO if they're going to reach the level of BILLION dollar fines.

IT'S THEFT.

Re:to be fair... (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27775175)

> There's no legal justification

Apparently, the court disagrees with you. Thanks for playing.

Re:to be fair... (1)

Explodicle (818405) | more than 5 years ago | (#27775161)

the money should be going to AMD who suffered from Intel's actions, not the coffers of the EU beaurocracy...

The entire market suffers from anticompetitive action, not just the second-biggest competitor or the one to complain first. If AMD wants reimbursement, they (and anyone else who wants some) will have to take Intel to court in a civil case, not a criminal one.

Playing Fair (3, Insightful)

CopaceticOpus (965603) | more than 5 years ago | (#27774203)

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.

Re:Playing Fair (2, Insightful)

AnalPerfume (1356177) | more than 5 years ago | (#27774467)

Perhaps the EU should introduce a second tier of punishment for anti-competitive practices. Those who are found guilty have only one chance to change their ways with independent observers allowed to go anywhere in the company, examine any documentation etc. Failure to comply means the second tier kicks in and the company is banned from doing business at all anywhere within the EU for a length of time. You could have the ban in place until observers are satisfied that things have changed, and those responsible at boardroom level have been removed from office. The banning could also be an option for first offenders depending on the seriousness of the offense.

DOJ anti trust case against Microsoft (1)

viralMeme (1461143) | more than 5 years ago | (#27774893)

"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.

It's illegal to make contractual sales in the EU? (-1, Flamebait)

drinkypoo (153816) | more than 5 years ago | (#27774207)

FTFA [timesonline.co.uk] :

The letter contained three specific charges: that Intel offered discounts to a major European personal computer distributor to favour its products[...]

OMFGWTFBBQ, discounts? GET THE BASTARDS! I thought it was only illegal to offer the product below cost to one customer while charging others some profitable price, and then only under certain situations, but certainly IANAL and if I were I'd be one in the US of A. Here's some more:

Following an anti-trust investigation of Intel launched six years ago, the Commission sent a list of complaints to the company in July 2007, accusing it of offering "substantial" rebates to computer makers that mostly used its chips.

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...)

Re:It's illegal to make contractual sales in the E (4, Insightful)

TheMeuge (645043) | more than 5 years ago | (#27774335)

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.

Re:It's illegal to make contractual sales in the E (1)

m.ducharme (1082683) | more than 5 years ago | (#27774517)

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?

Re:It's illegal to make contractual sales in the E (1)

NeoSkandranon (515696) | more than 5 years ago | (#27775467)

I think the OP's suggestion is that the law (or such parts of it that apply to this situation) are in error

AC Faces $1.3B Fine On Slashdot (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27774219)

Hugh G. Rection [www.goat.cx] writes

"Slashdot editors, who have been aggressively pursuing what they see as anticompetitive practices among frosty posters, could impose their largest fine ever in a market-dominance case against Anonymous Coward. The commission began investigating AC in 2000 after Signal 11, its arch-rival, filed a complaint. In two sets of charges, in 2007 and 2008, the commission accused AC of abusing its dominant position in first posts by giving large frosties to message board operators, by paying message board admins to delay or cancel logged in posters, and by offering frosties to blog concentrators at volumes large enough to require captchas to bring them under control. Some legal experts speculate that AC'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 a dirty hippy on acid,' said an antitrust and competition lawyer in London. In 2004 AC paid a fine of 497M, or $663M at current exchange rates, after being accused of abusing his dominance; the EU imposed another $1.3B fine in Feb. 2008."

Finning the consumer? (1)

zebadee (551743) | more than 5 years ago | (#27774221)

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.

Re:Finning the consumer? (1)

zebadee (551743) | more than 5 years ago | (#27774249)

oops got the double nn in the title there!

Re:Finning the consumer? (1)

cyber-vandal (148830) | more than 5 years ago | (#27774443)

Consumers will only be paying these fines if they buy Intel's products which presumably will be less attractive due to them raising their prices.

Re:Finning the consumer? (2, Insightful)

mpapet (761907) | more than 5 years ago | (#27774577)

Consumers were already paying more for Intel's anti-competitive behavior. The costs of corruption were being factored into the cost of their products already.

What disappoints me more is the moral turpitude that is rewarded and clearly condoned at Intel. http://en.wikipedia.org/wiki/Moral_turpitude [wikipedia.org]

Fine Them out of Business (2)

dugn (890551) | more than 5 years ago | (#27774401)

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.

Re:Fine Them out of Business (1)

AnalPerfume (1356177) | more than 5 years ago | (#27774597)

That may happen, and in all likelihood if if does, it'll be a HUGE US corporation, one who has been dominating the market so much that non-US companies struggle to enter the market. So if the big boys don't like having to compete within the rules and decide to leave, it'd open up the market for others to enter. This is not a bad thing. The assumption that the market will be missing something is bogus, it will be simply be filled by some other provider, or in all likelihood, many new providers actually competing against each other for customers......which is exactly what the big US corporations seek to avoid and are getting punished for.

Re:Fine Them out of Business (1)

langelgjm (860756) | more than 5 years ago | (#27774751)

You're skipping a step.

Too small a fine, and it's just looked at as a cost of doing business.

An appropriately-sized fine will make the cost of acting anti-competitively too much, which should motivate them to change their behavior.

Only when the fine is absolutely too large, _and_ the chance of them incurring it is enough, will they decide to stop doing business there.

I also doubt that a company like Intel would ever "stop doing business in the EU." Last time I checked, it was the world's largest unified market, larger than the U.S.

war is peace (1)

viralMeme (1461143) | more than 5 years ago | (#27774811)

"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 [studentsfororwell.org] , Freedom Is Slavery, Ignorance Is Strength, anti-competition practices reduces competition.

Re:Fine Them out of Business (1)

jareth-0205 (525594) | more than 5 years ago | (#27774859)

But corporations are not emotional entities, they are controlled by their shareholders and Intel will not sulk and take their ball home from a market of 500M people just because that market has some marginally more strict rules on free markets than the US does. (which is ironic in itself)

If a corporation gets into a position where it can bargain with a state on whether it follows the rules or not, we are *all* in serious trouble...

Re:Fine Them out of Business (0)

Anonymous Coward | more than 5 years ago | (#27774877)

ROFL, leaving the entire European market to AMD, are you fucking nuts? Or, rather, is there a way you could get on the Intel board?

Re:Fine Them out of Business (1)

MrMr (219533) | more than 5 years ago | (#27775123)

By leaving you mean Intel would rather break the law than make a profit?
At least that would show commitment.

I'm confused (0)

JoshuaZ (1134087) | more than 5 years ago | (#27774671)

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.

enlightenment here (4, Informative)

viralMeme (1461143) | more than 5 years ago | (#27774723)

"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.

Re:I'm confused (1)

Timothy Brownawell (627747) | more than 5 years ago | (#27774829)

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.

Re:I'm confused (1)

DaleGlass (1068434) | more than 5 years ago | (#27774839)

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.

Re:I'm confused (5, Insightful)

Chris Burke (6130) | more than 5 years ago | (#27774901)

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.

Re:I'm confused (1)

JoshuaZ (1134087) | more than 5 years ago | (#27775119)

Excellent explanation. Thanks.

How much does the EU stand to gain? (1)

BlueKitties (1541613) | more than 5 years ago | (#27774837)

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.

Re:How much does the EU stand to gain? (1)

Chatterton (228704) | more than 5 years ago | (#27775509)

The money goes into the general budget of the EU (Budget [europa.eu] ) into the programs of the EU (Budget in figures [europa.eu] )

graverolling (1)

happy_place (632005) | more than 5 years ago | (#27774915)

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.

How Much did they Profit From Their Alleged Abuse? (5, Interesting)

Greyfox (87712) | more than 5 years ago | (#27774953)

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?

Re:How Much did they Profit From Their Alleged Abu (1)

brentonboy (1067468) | more than 5 years ago | (#27775225)

I accidentally modded parent redundant... meant to mod interesting or insightful, so I'm commenting to erase it.

But did Microsoft really pay $663M? (1)

edxwelch (600979) | more than 5 years ago | (#27775237)

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

Good Idea (1)

Gallomimia (1415613) | more than 5 years ago | (#27775339)

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?

What Intel should do... (-1, Flamebait)

Brandybuck (704397) | more than 5 years ago | (#27775501)

What Intel should do: pull out of Europe. These fines are a clear signal that the EU bureaucracy does not want Intel around. So they should leave. Close all their European offices, stop all direct sales to European addresses, etc. Only an idiot would aim to be successful in a regime that actively punishes success.

This is not about monopolies, because Intel is NOWHERE close to being a monopoly. Intel and AMD vigorously compete. Rebates to manufacturers is part of that competition, and standard business practice. AMD does it too.

It's like the old Russian joke: three watchmakers are in the Gulag. The first one says he was imprisoned for having prices that were too low, proof of trying to corner the market. The second says he was imprisoned for having prices too high, proof of a monopoly position. The third says he was imprisoned for having prices the same as other watchmakers, proof that he was in collusion. Antitrust isn't about stopping monopolies it's about arbitrarily punishing those a government has in its sights. Instead of competing on quality, performance or service, businesses quickly learn they need to compete on lobbying skills.

It's the Economy dummies. (0, Troll)

nasdaq (81135) | more than 5 years ago | (#27775543)

Intel hasn't prevented people from getting what they wanted. People pay for what they want unless the Gov gets involved. I've paid more for both when I wanted something based on the quality.

You know by this same logic MS should get paid by Redhat because you get a free os which is less than the cost to make it.

EU is just looking to make a buck and redistribute wealth. Socalists and Facist suck.

WTF (1)

hesaigo999ca (786966) | more than 5 years ago | (#27775571)

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?

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