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EU Regulator Raids Intel Offices

Zonk posted more than 6 years ago | from the bad-day-to-be-a-drone dept.

Intel 138

stevedcc writes "BBC news is reporting that Intel's offices in Munich, Germany have been raided by European Union competition regulators. From the article: 'The Reuters news agency reported that the Commission also raided computer retailers on Tuesday including Germany's Media Markt, which sells PCs with Intel central processing units but not those made by AMD. Regulators have the power to fine Intel up to 10% of annual turnover if they find it guilty of stifling competition. Intel has said it is "confident" it had acted lawfully.'"

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138 comments

The line forms to the right (4, Funny)

erick99 (743982) | more than 6 years ago | (#22393192)

"Intel has been accused of trying to abuse its dominant market position by selling its products below cost price and making cash payments to customers".


Where do I get in line for this?

Re:The line forms to the right (4, Insightful)

snowraver1 (1052510) | more than 6 years ago | (#22393228)

You don't really want it. Competition would be way better in the long run. Competition keep prices down and innovation moving. If you really want to help the industry, buy AMD so that next time you are building a computer, you will still have the option to choose the CPU.

Re:The line forms to the right (1)

beckerist (985855) | more than 6 years ago | (#22393264)

If they are selling at below cost, doesn't that mean that competition is working?

Re:The line forms to the right (4, Insightful)

eln (21727) | more than 6 years ago | (#22393320)

Sure, it means that competition is present at the moment, but it also means they're attempting to eliminate the competition. A larger company will sell below cost because they know a smaller company will go bankrupt trying to compete on price well before they will. If this sort of thing goes unchecked, the larger company will jack up its prices after the competition is eliminated, and the end result will be no choice and high prices for consumers.

Re:The line forms to the right (0)

everphilski (877346) | more than 6 years ago | (#22393582)

So... you want the Government to fix pricing? Yech.

Re:The line forms to the right (3, Insightful)

Hognoxious (631665) | more than 6 years ago | (#22393758)

So... you'd prefer a monopoly with a vested interest to do it?

Re:The line forms to the right (-1, Troll)

urbanriot (924981) | more than 6 years ago | (#22394328)

What's preventing AMD from doing it? Maybe they did it in the past? is it Intel's fault that AMD has an inferior product, ridden with bugs?

Re:The line forms to the right (1)

everphilski (877346) | more than 6 years ago | (#22394362)

I prefer the market to bear itself out, yes.

And saying Intel is a monopoly, at this point, is laughable. Unfair practices? Perhaps. We will find out. But they aren't a monopoly yet.

Re:The line forms to the right (0)

Cal Paterson (881180) | more than 6 years ago | (#22394676)

Yes. That is, after all, the entire point of the free market. The market sets prices, and when the market price exceeds the natural price by enough, competition to begin.

Monopolies with prices that are exorbitant compared to the natural price rarely exist without a technical, legal or otherwise unavoidable monopoly (USA broadband operators for the technical monopoly (dubious though that is), Microsoft for the legal monopoly).

Re:The line forms to the right (0)

Anonymous Coward | more than 6 years ago | (#22394584)

It is already acting against this practice.
http://en.wikipedia.org/wiki/Predatory_pricing [wikipedia.org]
Read first 2 paragraphs.

Re:The line forms to the right (1)

WaroDaBeast (1211048) | more than 6 years ago | (#22395118)

You don't need to have the government fix prices; you just need laws against selling below cost.

Re:The line forms to the right (1)

everphilski (877346) | more than 6 years ago | (#22395294)

Why?

I have this widget, which normally sells for $5. If I want to sell it for $2.50, what right has anyone to say I can't? Again, I say, it's government price fixing. They are setting a minimum sale price threshold.

Re:The line forms to the right (1)

Cal Paterson (881180) | more than 6 years ago | (#22394620)

they're attempting to eliminate the competition.
No, they are trying to eliminate the competitor(s). And by the way, this means that they are effectively competing.

Your idea of the company bankrupting the other company is a misunderstanding. This happens extremely rarely; the overall cost of selling at a loss for a long time > the cost of competing for the future. Intel isn't try to do this at all, and it would need an absurd market situation for it to work, even if they wanted to. The actual situation is that Intel and AMD have both improved their products over the past few years, and there is no evidence to say that competition is going to be stifled in the foreseeable future.

Re:The line forms to the right (4, Insightful)

s_p_oneil (795792) | more than 6 years ago | (#22396000)

No, it doesn't. It means that AMD is down and Intel is going in for the kill. If AMD is killed, competition in that market will be completely dead. CPU prices will soar, Intel won't need to spend so much on research, and everyone else will be so far behind Intel that no one will be able to catch up. In short, the consumers will get screwed.

Re:The line forms to the right (0)

Anonymous Coward | more than 6 years ago | (#22393402)

To hell with that! I want my cheap chips and free money now.

Don't you mean (2, Funny)

zappepcs (820751) | more than 6 years ago | (#22393812)

Money for nothing and chips for free?

Re:The line forms to the right (1)

explosivejared (1186049) | more than 6 years ago | (#22393674)

you will still have the option to choose the CPU.

Exactly, buying something at the lowest price now != being a rational actor in a market economy. It's the line of thinking that the only cost associated with doing business is the one I see right in front of me that has led to the credit crunch, the negative savings rate, and just about every other economic problem we have now. If we could please just squash that now, we would all be a lot better off. You save a few bucks now by going with a cheaper product, but if you depend on an industry long term, it's in your best interest to promote a diverse and competitive playing field. Intel has basically been a monopoly for forever. I buy AMD whenever I reasonably can. I know expecting people to make informed economic decisions is probably a fantasy, but we could really use it.

Re:The line forms to the right (2, Insightful)

RightSaidFred99 (874576) | more than 6 years ago | (#22393896)

Actually, you're 180 degrees wrong. You're effectively rewarding incompetence. This is why many people are against the credit bail-out. You are saying that even though these companies made risky loans and lost a bundle of money on it, we're going to bail them out because it's in our best interests. This logic gets built into the market, and people start making bigger and bigger risks.

Your "informed economic decision" effecitvely rewards a company for poor performance. Not only that but it gets you, the buyer, a technically inferior product.

You're also baking in the assumption that price is the only differentiator here, when clearly it isn't. There's support, technical compatibility and platform choice, speed, stability, etc... that all goes into a decision like this. Now, if all these things are close enough to equal then by all means pick your favorite company if you want them to do well. But just buying a crappier chip and paying more for it out of some misguided sense of econ-101 isn't real wise.

Re:The line forms to the right (3, Informative)

agent_no.82 (935754) | more than 6 years ago | (#22394040)

Except that given the situation here, the substantial costs of entering the CPU market mean that if Intel does end up bankrupting AMD, (which is quite close in performance outside the high range) there will be no serious competitors and thus significantly less incentive for them to continue a CPU arms race. Also, consumers will end up paying significantly more than they would otherwise.

Re:The line forms to the right (3, Informative)

RightSaidFred99 (874576) | more than 6 years ago | (#22395736)

That's the way the market works. Let's say AMD goes out of business and Intel raises prices. Suddently, there's a huge incentive for competitors to come up with something new and better. If Intel charges $1500 for a 3GHz 8-core processor supposing AMD goes out of business, they've taken CPUs further away from being a commodity item (which they're dangerously close to now). Suddenly not only the big players but the small research companies have an incentive to do something new to take a part of that market.

For example, they may develop a much faster incompatible chip which can run virtual machines emulating x86 at the same speed as a real x86 chip. Or they may just take AMD's IP and build on it to create a competitive chip and use someone else's fabs.

High prices from a monopoly on a non-supply limited item are part of the marketplace. It drives innovation. So in the end, I don't even find your "worst case" scenario all that bad. But on a realistic front, AMD isn't going out of business. Even if they bankrupt their products will still be made and sold for the forseeable future by _someone_.

Re:The line forms to the right (3, Informative)

explosivejared (1186049) | more than 6 years ago | (#22394210)

It's a little different when you're bailing out Goldman Sachs, which doesn't have an 800 lb gorilla of monopoly on its back like AMD does. Bailing out banks for insane lending creates moral hazard and positively reinforces bad behavior. Investing in AMD doesn't. It promotes competition and a more efficient market.

All those differentiations you speak about will suffer if there is only one manufacturer. And we all know how well the government busts up monopolies, so if you have any vested interest in CPU's, support AMD.

Please do tell how promoting an actual market is a misguided sense of "econ-101." Note I was speaking about the specific AMD situation when making my argument. I'm not here to argue if all things are equal between the two, just that having AMD around is important.

Re:The line forms to the right (0, Troll)

RightSaidFred99 (874576) | more than 6 years ago | (#22394434)

Investing in AMD doesn't. It promotes competition and a more efficient market.
You're effectively giving charity to AMD. They can't win your money by making the best product, but you're convinced that it will somehow serve you in the long run. I don't know how you can rationally make such an analysis, but I certainly wouldn't bet on it if I were you. Your presumption seems to be that your dollars are going to go towards improving AMD. Do you have any evidence of this? How do you know your dollars aren't going towards the big-wigs in the company? Or huge inefficiencies? Or the stockholders of the various companies AMD buys from time to time?

And we all know how well the government busts up monopolies, so if you have any vested interest in CPU's, support AMD.
You can't bust up an effectively atomic unit, but anyway... AMD has been around a long time, and their products and infrastructure aren't going anywhere. Let's say AMD really goes down the drains and Intel doubles their prices. What do you think IBM, Samsung, or HP (or others) are going to make of that? If I were them I'd think that maybe the CPU market can bring in a lot of money if they can buy AMD and fix their problems.

Re:The line forms to the right (1)

dave420 (699308) | more than 6 years ago | (#22393838)

Most folks just want the best processors, which at the moment means Intel. It's easy to forget most folks who buy CPUs aren't thinking about the effects of their purchase, they just want the best tool for the job. Maybe AMD should be more aggressive when it comes to their marketing and parter deals?

Best Processors (2, Insightful)

Enderandrew (866215) | more than 6 years ago | (#22394032)

At what level? At the top level, yes Intel has a lead right now. There is no denying that. But the low-end AMD processors are so cheap, they give far better bang for the buck. The last processor I bought was an AMD X2 3600+ brand new for $35. At the time, the cheapest comparable Intel dual-core offering was $150. They benchmarked about the same, and the X2 overclocks amazingly well.

$35 or $150, wow that is a tough one.

Again, Intel isn't always the best processor.

Re:Best Processors (1)

FredFredrickson (1177871) | more than 6 years ago | (#22394408)

I was about to say - Most of the people spewing the intel is better than AMD crap are just reciting marketing BS.

Thanks to the fact that there's no easy way to compare which processor is supposed to match up with which when it comes to comparing brands- the only way I find you can compare processors is price class. I find every AMD processor I've tested outperforms it's Intel same-price-class counterpart in benchmarks.

Since we can't compare things like mhz anymore, all we have are benchmarks and price classes..

Re:The line forms to the right (2)

TheRaven64 (641858) | more than 6 years ago | (#22394086)

Most folks just want the best processors
Very few people want the best processor. Most people want the cheapest processor that is 'good enough.'

Re:The line forms to the right (1)

Cal Paterson (881180) | more than 6 years ago | (#22394728)

Then, from their perspective, that is the best. This interjection isn't germane to the GPs' main point; that people generally choose the processor that suits their needs best at the lowest cost.

Re:The line forms to the right (1)

lcsjk (143581) | more than 6 years ago | (#22395786)

I think you should check the facts instead of believing the Intel marketing that says "Intel is the best". I have not yet read any article that gives Intel a lead except in higher prices.

Have you ever wondered why Intel cannot sell their processors at the same low price as AMD? The size, transistor count etc., are comparable. Does anyone really believe that the Intel Fab houses are more expensive (for 20 years) than AMD or others?

Some people think that the competition is "fair", and that Intel can sell below cost if they want to. Intel has a much broader product line than AMD, so they can use the profits from other products to keep selling below cost until the smaller company dies. Then they will resume their high(er) prices.

I use AMD whenever I can because at all levels, AMD seems to be faster. I can't claim they are really better, but if the price is the only difference, I will go for price and keep the competition on for Intel.

Gone Too Far (4, Insightful)

Frosty Piss (770223) | more than 6 years ago | (#22393262)

As to Media Markt, if they wish to sell only the crap from Intel, why shouldn't they be allowed to? Simply because you don't "like" a company (...Microsoft...) doesn't mean in a free market, retailers should not be able to be exclusive.

When a group actually hates a company as much as people do here with Microsoft/Intel, it's easy to become overly biased against the rights of people to choose these two businesses.

Re:Gone Too Far (5, Insightful)

Silver Sloth (770927) | more than 6 years ago | (#22393344)

How it works:-
  1. Dominant player in market cuts costs to below cost of manufacure
  2. Secondary player has to cut costs to match
  3. Secondary player has shallower pockets than dominant player and goes out of business
  4. Dominant player is now only player and can raise costs as high as they want to make back all they lost in action #1
There are reasons for market regulators, and not just because we European liberals like big government.

Re:Gone Too Far (1)

Vinegar Joe (998110) | more than 6 years ago | (#22393506)

I guess that also explains European government subsidies to Airbus.

Re:Gone Too Far (0)

Anonymous Coward | more than 6 years ago | (#22393634)

Its not like Boeing doesn't get subsidies too. It happens in a lot of industries but in this case it isn't illegal so get over it.

And US subsidies to Boeing. (0)

Anonymous Coward | more than 6 years ago | (#22393664)

natch

Re:Gone Too Far (1)

Edzor (744072) | more than 6 years ago | (#22394092)

yes because Boeing is completely void of government aid......

Re:Gone Too Far (2, Insightful)

abigsmurf (919188) | more than 6 years ago | (#22393670)

The problem is Intel are producing better chips than AMD and are able to make them for less because of lower failure rates and smaller die sizes. The main problem with the CPU industry at the moment is AMD are just doing bad in general and not keeping pace.

Re:Gone Too Far (4, Insightful)

stevedcc (1000313) | more than 6 years ago | (#22393742)

The problem is Intel are producing better chips than AMD and are able to make them for less because of lower failure rates and smaller die sizes. The main problem with the CPU industry at the moment is AMD are just doing bad in general and not keeping pace.

If this had always been true, it might be fair to say that AMD were a poor competitor. However, from the launch of the Athlon until the launch of the Core2, for several years, AMD had a better product, yet found major difficulties in getting market share. Intel's alleged tactics are illegal, and it's right that they should be properly investigated. It's just a pity that any fine imposed will hurt Intel but not benefit AMD or consumers, who are the real injured parties.

Re:Gone Too Far (0)

Anonymous Coward | more than 6 years ago | (#22394238)

Ahh, the AMD excuse. It sounds a little like a variation of the Chewbaccah defense to me.

"We had a better product. But we didn't get market share. Therefore, you must convict!"

It's a joke. AMD _did_ get better market share. Their product was marginally to moderately better than Intel's product, it would be revisionist history to claim they blew Intel out of the water. They got good press for it, and they sold all the product they could make. That's about all you can hope for with a short window of superiority against a previously dominant opponent. Then they fell behind and have started to lose that traction.

Now Intel has a marginally to moderately better product (it doesn't blow AMD out of the water). Unfortunately for AMD, they're going to have a hard time catching up.

Re:Gone Too Far (0)

Anonymous Coward | more than 6 years ago | (#22395222)

It's a joke. AMD _did_ get better market share. Their product was marginally to moderately better than Intel's product, it would be revisionist history to claim they blew Intel out of the water. They got good press for it, and they sold all the product they could make. That's about all you can hope for with a short window of superiority against a previously dominant opponent. Then they fell behind and have started to lose that traction.

One of the things Intel had been doing is looking at how many CPUs a retailer sold then offering them a discount on ALL the Intel CPUs they'd bought if they bought xx more (calculated to keep AMD CPUs at or below 10% of the market). To compete with the amount they'd be saving, AMD had to drop the prices of their CPUs by over 40%. The only market this didn't work is servers which until Core2 was totally in AMD's court. Opterons were faster (especially in FPU stuff), better value per $$ and ran much cooler.

Re:Gone Too Far (2, Insightful)

Guspaz (556486) | more than 6 years ago | (#22394318)

It doesn't help that, the moment they start to get traction towards resolving their anti-trust concerns, their products take a nosedive in quality.

In the CPU front, the Core 2 is spanking the Phenom in all market segments, although the Athlon series is still holding on to the very low-end on low cost alone.

On the GPU front, they just gave up on the high end entirely for a while. The only way they can even compete with nVidia's 8800 series (which is about to be replaced with new cards) is to stick two of their best GPUs on one card. Yes, it's a neat technical solution, but it'd be a heck of a lot more impressive if each of those two GPUs was the equal of an 8800. nVidia's soon-to-be-released 9000 series is going to hurt AMD a lot. What're they going to do, put four GPUs on a card to compete with nVidia's one? What happens when nVidia starts putting multiple GPUs on a card, offering double the performance of AMD's solution?

It's only a matter of time before the Core 2 products start breaking into the very low-end market, and AMD gets supplanted there too. Unless their next generation of CPU and GPU products can actually compete on merit, it may not matter if Intel's semi-monopoly is broken.

Re:Gone Too Far (1)

abigsmurf (919188) | more than 6 years ago | (#22394680)

I suppose. Depends on how far back the investigation goes. The EU aren't known for being up to speed in anti-trust cases (the record fine to nintendo was one of the worst cases of them lagging).

Re:Gone Too Far (0)

Anonymous Coward | more than 6 years ago | (#22395768)

The problem is Intel are producing better chips than AMD and are able to make them for less because of lower failure rates and smaller die sizes. The main problem with the CPU industry at the moment is AMD are just doing bad in general and not keeping pace.

If this had always been true, it might be fair to say that AMD were a poor competitor. However, from the launch of the Athlon until the launch of the Core2, for several years, AMD had a better product, yet found major difficulties in getting market share. Intel's alleged tactics are illegal, and it's right that they should be properly investigated. It's just a pity that any fine imposed will hurt Intel but not benefit AMD or consumers, who are the real injured parties.

Lets not forget that one of the reasons Michael Dell took over his company again, and one of the reasons Kevin Rollins was forced out, was that Intel was apparently bribing Dell something like a BILLION DOLLARS A YEAR just to avoid even considering making AMD based systems.

Intel's not a nice company. Why do people even give them the benefit of the doubt?

http://money.cnn.com/blogs/legalpad/2007/02/suit-intel-paid-dell-up-to-1-billion_15.html [cnn.com]
http://www.theinquirer.net/en/inquirer/news/2005/07/02/michael-dell-kevin-rollins-named-in-amd-subpoena [theinquirer.net]

Re:Gone Too Far (1)

robot_love (1089921) | more than 6 years ago | (#22393806)

You don't think that has anything to do with how much money Intel can invest in their products compared to AMD? That's like saying black people shouldn't be allowed to go to school because they're uneducated, or that someone is too sick to get cancer. You have shown the symptom of the problem, not the cause.

I tried to work Nazis in to my illustration, but failed.

Re:Gone Too Far (1)

abigsmurf (919188) | more than 6 years ago | (#22394650)

That's a false/bad analogy. You have a legal right to an equal chance at education and healthcare. Businesses don't have a legal right to force you to buy their products. There's simply little reason today for anyone to buy a phenom over a core2, it's simply an inferior product and currently that's being reflected in the sales of the products.

Re:Gone Too Far (1)

robot_love (1089921) | more than 6 years ago | (#22395666)

No, I think the analogy still holds. Irregardless of anyone's rights, people who are less educated will tend to do worse in school, yes? They don't send 8-year-olds to advanced calculus because they won't understand it. They may with years of training in between. It's the same for Intel/AMD. Intel has 8 times more money because they are a monopoly and get the vast majority of sales. Thus, they have 8 times more money to invest in making their products better. Therefore their products are better.

Just because you can find a difference between my analogy and the actual situation, doesn't invalidate my analogy. You could also say my analogy is invalid because a black person could wear a hat where a company cannot. So what?

Re:Gone Too Far (5, Interesting)

matria (157464) | more than 6 years ago | (#22393708)

This happens in other markets as well. Some years ago my husband worked for Pfizer. Pfizer and most of the other big pharmaceuticals made penicillin. It wasn't exactly a large profit item, but a good seller. Then a European company started "dumping" and nobody else was willing to match their prices. So all the other pharmas quit making penicillin; most of them re-tooled their penicillin facilities to other products. Pfizer also quit making penicillin, but their equipment was so old they just left it sit. The European company misjudged and ended up going out of business. Suddenly there was no supply of penicillin. So for a couple of years, until some other companies got their penicillin facilities retooled back to making penicillin, Pfizer had the only world supply of penicillin,and could pretty much charge whatever they wanted.

So this sort of behavior is definitely not a good thing. Except for Pfizer there for a while, anyway.

Re:Gone Too Far (1)

ThJ (641955) | more than 6 years ago | (#22393988)

Mod parent up, Interesting.

Re:Gone Too Far (0)

Anonymous Coward | more than 6 years ago | (#22394792)

Moderation walkthroughs. Who said /. wasn't kind to new users?

Re:Gone Too Far (2, Informative)

Otter (3800) | more than 6 years ago | (#22395350)

As it happens, the EU was raiding pharmaceutical companies [corante.com] a few weeks ago over generics pricing issues. Sounds like they're getting pretty, err, proactive on antitrust issues over there...

That's fine (2, Insightful)

Sycraft-fu (314770) | more than 6 years ago | (#22393868)

But that's clearly not the case with Intel. Their products are not being sold below cost, indeed they are making plenty of money. Also a little searching turns up that they aren't dumping (selling cheap abroad and full price at home) or anything like that. So what it appears to be is that Intel produces a quality product that AMD is having trouble competing with. Well, that's the free market at work. AMD's problem isn't that Intel is undercutting their prices to a level they can't sell at, their problem is that Intel has better chips out.

So unless you can show how Intel has been doing something illegal, like selling below cost, then this seems to just be a punitive action since AMD has a big fab in Germany, and Intel does not have any European fabs.

Re:That's fine (1)

Silver Sloth (770927) | more than 6 years ago | (#22394038)

From TFA

Intel has been accused of trying to abuse its dominant market position by selling its products below cost price and making cash payments to customers.
Maybe TFA is wrong but they seem to have been accused of selling below cost.

I would have to think it is (1)

Sycraft-fu (314770) | more than 6 years ago | (#22394688)

Just by looking at their balance sheet. The whole "selling below cost" works when you are the biggest because you have a big wodge of cash so you can afford to lose money for awhile, which you will if your revenues are below your costs. However that's not what has been happening with Intel. Rather, they've been making tons of money. So it is pretty clear that while they may not be charging as much as they could, they aren't going below cost. This is especially true since the processors are their big market. I mean I could see Intel doing it with some other market, like say NICs, that is a small part of their business. Sell below cost there, make up the difference. However processors are their bread and butter, if they start selling at a loss there, it is going to hit the bottom line hard and that just hasn't happened.

I think it is mostly just sour grapes on AMD's part. They had a good run where Intel's processors weren't that impressive, and they were able to gain some market. However now the tables have turned and Intel has a far more impressive offering, so their share is slipping. As far as I can tell it isn't anything illegal, it is just Intel flat out providing a better product.

Re:I would have to think it is (2, Insightful)

Pulzar (81031) | more than 6 years ago | (#22396046)

This is especially true since the processors are their big market. I mean I could see Intel doing it with some other market, like say NICs, that is a small part of their business.

It's exactly what they were doing when AMD was dominating the desktop and 1P/2P server performance with Athlon. They were giving big customers huge rebates on their desktop and 1P/2P server chips to keep AMD from gaining market share, while raking in the profits on the mobile and 4P+ server chip sales since they were still dominating there. They were still profitable, while making AMD's life difficult.

It's also not true that they were still making tons of money. If you look at their gross margins, they severely declined over the last few years because of this competition with AMD.

Re:That's fine (1)

click2005 (921437) | more than 6 years ago | (#22394854)

Intel has fabs in Leixlip, Ireland.

Re:Gone Too Far (1)

Frosty Piss (770223) | more than 6 years ago | (#22393978)

Yes, but in a free market, there WILL be losers and winners. Otherwise, maybe we don't have a free market? It is, after all a competition to the death (the way we play it these days), it's not a friendly game where we split up the market and we all get some...

Re:Gone Too Far (1)

Silver Sloth (770927) | more than 6 years ago | (#22394102)

This assumes that you believe that a totally free market is a good thing(tm). We Europeans tend to take a more interventionist approach, especially where one competitor seems to have been accused of breaking the law. If Intell were sending round the goon squad to smash up AMDs manufacturing plants would this be Ok because

there WILL be losers and winners

Re:Gone Too Far (1)

Cal Paterson (881180) | more than 6 years ago | (#22394788)

5. New competition enters the market as dominant player is now charging prices which are "high".

There are almost zero examples of what you state actually occurring as you say it will. Normally because the cost to the dominant player of selling at a loss for a prolonged period of time is too high. Futhermore, you're confusing the word "cost" with "price". In this situation, the competitors are cutting prices below costs. They are not cutting costs.

I'm guessing you might not be a native speaker, so the mistake could be understandable. But the distinction is important.

Re:Gone Too Far (1)

ArcherB (796902) | more than 6 years ago | (#22393438)

As to Media Markt, if they wish to sell only the crap from Intel, why shouldn't they be allowed to? Simply because you don't "like" a company (...Microsoft...) doesn't mean in a free market, retailers should not be able to be exclusive.
The problem is not that Media Market was selling Intel because they liked them, but because they would get special deals from Intel if they DIDN'T sell AMD. That's what Intel (allegedly) does in markets where AMD might stand a chance.

Think of it as the Walmart strategy. They move into a town and sell everything below what they pay for it. There is no way that the local stores can compete and go out of business. When Walmart is the only game in town, they raise prices and shift those profits to the next town to make up for the new store there that selling below wholesale. Repeat as necessary.

The only problem I see with it is that Intel can only be charged 10%. They have used unfair practices (allegedly) to gain near monopoly status and fund the R&D and production capacity that produces Intel's current line of products. The only fair punishment would be to take at least half of all the proceeds Intel made over the years they were using unfair and illegal practices and give it their competition, plus rights to all IP gained due to those profits. They take the house, cars and boats that were bought with drug-dealer money don't they? What's the difference?

Re:Gone Too Far (1)

Frosty Piss (770223) | more than 6 years ago | (#22393612)

The problem is not that Media Market was selling Intel because they liked them, but because they would get special deals from Intel if they DIDN'T sell AMD. That's what Intel (allegedly) does in markets where AMD might stand a chance.
And this is business, as it has been for 100's of years. If AMD has a good product, they can do the same. By the way, last time I checked, the Apple Store doesn't sell Zunes. Shall I bitch at the regulators about competition?

Re:Gone Too Far (0)

Anonymous Coward | more than 6 years ago | (#22393888)

By the way, last time I checked, the Apple Store doesn't sell Zunes. Shall I bitch at the regulators about competition?
Apple Stores are free to sell whatever they want. No surprise that they don't sell competing products since they are owned by Apple. Any other store is also free to sell both iPods and Zunes, or one of them, or none. That's also no problem. A problem would be if Apple would tell these stores: "We give you special deals if you stop selling the Zune."

Re:Gone Too Far (1)

Frosty Piss (770223) | more than 6 years ago | (#22394552)

A problem would be if Apple would tell these stores: "We give you special deals if you stop selling the Zune."
Exclusivity deals are nothing new. It seems only an issue when it's our favorite targets. Very hypocritical, which is nothing new in the Open Source Movement. Chairman Stallman approves.

Re:Gone Too Far (1)

gandhi_2 (1108023) | more than 6 years ago | (#22393440)

Whoa there buddy!

Intel makes Apple CPU's now and as such they are beyond reproach!

And the Lord came ford and said, "You better recognize."

Re:Gone Too Far (1)

mpapet (761907) | more than 6 years ago | (#22393486)

if they wish to sell only the crap from Intel, why shouldn't they be allowed to?

This kind of mentality wrongly assumes that there is a sort of perfect market state that translates into people switching retailers/PC's as features/price change. This is totally untrue. Consumers of all kinds normally suffer all kinds of bad product based on a number of factors that can be generalized into the herd mentality. Look at how much consumers have been overcharged for CD's and DVD's.

Intel isn't the only one doing it, that's for sure. But good on the EU for cracking down on the well-known abuse. I just wish we had an FTC/DOJ with the cajones to do it in the U.S.

Re:Gone Too Far (1)

everphilski (877346) | more than 6 years ago | (#22393640)

This kind of mentality wrongly assumes that there is a sort of perfect market state that translates into people switching retailers/PC's as features/price change.

If I want to change from an Intel to a AMD CPU, like I did last year, all you have to do is purchase the replacement CPU and an appropriate motherboard. All other perhipherals are usable under either system. It doesn't get much easier than that ... It isn't like I have to throw away my video card or data to upgrade CPU's.

Oh. If Only... (1)

mpapet (761907) | more than 6 years ago | (#22393930)

In the non-technical world your statements are generally inconceivable.

1. If you are running windows like most consumers in the world, you cannot do that without a fresh install of the OS. As more of these users are forced into Vista, this gets harder as there are license restrictions preventing this.

2. Regardless of OS, you understand that the bits and bobs are roughly interchangeable. You are in the minority.

3. the vast majority of computer users are not you and generally don't mind over paying for their hardware, OS and HP peripherals for the same reasons Intel is being investigated.

Your argument is perfectly logical and reasonable, it's just that it applies to practically no one compared to the average computer user.

Re:Oh. If Only... (1)

Anonymous Coward | more than 6 years ago | (#22394162)

1. If you are running windows like most consumers in the world, you cannot do that without a fresh install of the OS. As more of these users are forced into Vista, this gets harder as there are license restrictions preventing this.
You should get your geek card suspended for a week. Not only is it possible to do without reinstalling the OS, it is pretty easy.

Step 1: Open the device manager and remove the chipset drivers
Step 2: Power down the system and replace the motherboard
Step 3: Boot system and install new drivers
Step 4: If requested, call Microsoft to re-activate Windows

My windows PC at home runs a 5+ year old installation of XP that was originally an Athlon but is now a Core2 Duo. For shame to claim that this is impossible!

Re:Oh. If Only... (1)

everphilski (877346) | more than 6 years ago | (#22394440)

If you are running windows like most consumers in the world, you cannot do that without a fresh install of the OS. As more of these users are forced into Vista, this gets harder as there are license restrictions preventing this.

Like the AC said, I swapped out chips and motherboards without reinstalling Windows. Just installed updated firmware drivers and an AMD dual core patch to Windows and I was good to go.

Regardless of OS, you understand that the bits and bobs are roughly interchangeable. You are in the minority.

Irrelevant. Your average user won't care to upgrade an individual component based on a specific need, because that specific need does not arise, so their comprehension of the situation doesn't matter.

the vast majority of computer users are not you and generally don't mind over paying for their hardware, OS and HP peripherals for the same reasons Intel is being investigated.

The vast majority of computer users are corporations, not end users. They buy computers by the hundreds and thousands. These people are extremely budget-conscious. A few bucks per machine translates into thousands or tens of thousands saved.

Re:Oh. If Only... (1)

maxume (22995) | more than 6 years ago | (#22394818)

It is impossible for somebody to willingly overpay for something. Value is in the eye of the buyer.

I see where you are coming from, that people are paying higher prices than they would be in a better functioning market, but I'm not sure that the seller automatically gets blamed, or even that the situation needs remedy. Take something like tobacco -- essentially every single user would actually be better off in the long term if they stopped using tobacco, but if you asked them, on average, they aren't going to want the government to take away their tobacco. So the government probably still has a role in making sure that tobacco companies aren't spiking the water, but I'm not sure that it gets to tell an adult where to spend their money. It's a bit of a stretch, but nicotine addiction is at least as coercive as the sunk costs that joe somebody has in one form of hardware or another.

Re:Gone Too Far (1)

Frosty Piss (770223) | more than 6 years ago | (#22393694)

Well, then, the only real solution is where The State operates all retail stores and markets all products equilly. As in Cuba and Soviet Russia.

Re:Gone Too Far (1)

agent_no.82 (935754) | more than 6 years ago | (#22394138)

It's cute that you think the only reaction to a market failure is communism instead of regulation.

Re:Gone Too Far (1)

Cal Paterson (881180) | more than 6 years ago | (#22394826)

This kind of mentality wrongly assumes that there is a sort of perfect market state that translates into people switching retailers/PC's as features/price change. This is totally untrue. Consumers of all kinds normally suffer all kinds of bad product based on a number of factors that can be generalized into the herd mentality. Look at how much consumers have been overcharged for CD's and DVD's.
Only to an extent. If what I will call the vendors' mistake (buying expensive processors) produces a difference in price larger than the inconvenience of shopping elsewhere, people will switch vendor. If needed, a new vendor will arise.

CD's and DVD's are a bad example because they're not a free market, and don't obey any of the normal rules. They are a partly state sanctioned monopoly (because of copyright).

Re:Gone Too Far (1)

henni16 (586412) | more than 6 years ago | (#22394404)

As to Media Markt, if they wish to sell only the crap from Intel, why shouldn't they be allowed to?


I'm pretty sure it isn't about prohibiting them to sell what they want.
It's a lot more likely they targeted MediaSaturn to gather evidence for illegal business practices by Intel, i.e. finding out whether the decision to go Intel-only is based on bribes, kickbacks etc.

Re:Gone Too Far (0)

Anonymous Coward | more than 6 years ago | (#22394880)

if they wish to sell only the crap from Intel, why shouldn't they be allowed to?
This is why there is a raid. Was this really the sellers decision? Or was it Intel making (illegal?) presure, and selling under cost (illegal dumping) if they agree to not sell AMD?

Chances are, they found some paper trail at the vendor's office hinting to that, and they try to get the proof from Intel's side for a better court case.

So... (0)

Anonymous Coward | more than 6 years ago | (#22393292)

Is this AMD's excuse for sucking the past year and a half?

Karma Calling? (0, Flamebait)

pembo13 (770295) | more than 6 years ago | (#22393302)

for what they did to OLPC?

AMD has built some big expensive fabs in Germany (4, Insightful)

mikeabbott420 (744514) | more than 6 years ago | (#22393310)

When this happens in Ireland it will be a surprise.

Re:AMD has built some big expensive fabs in German (0)

Anonymous Coward | more than 6 years ago | (#22393594)

According to Intel's website: "Ireland is Intel's manufacturing and technology centre for Europe and the largest manufacturing site outside the United States."

Re:AMD has built some big expensive fabs in German (0)

Anonymous Coward | more than 6 years ago | (#22393972)

When this happens in Ireland it will be a surprise.
These were not German authorities, but EU authorities. Both Ireland and Germany are in the EU.

Re:AMD has built some big expensive fabs in German (0)

Anonymous Coward | more than 6 years ago | (#22394018)

Same thing in new york. Look up recent news of NY attorney general making noises about going after Intel. Then investigate AMD's soon to be built fab in...guess? Yeah, New York. It's hilariously transparent.

Re:AMD has built some big expensive fabs in German (0)

Anonymous Coward | more than 6 years ago | (#22394186)

Same thing in new york. Look up recent news of NY attorney general making noises about going after Intel. Then investigate AMD's soon to be built fab in...guess? Yeah, New York. It's hilariously transparent.
The comparison would work if it were the German authorities starting an investigation. But it wasn't, it was the EU. And while AMD surely is a larger investor in Germany than Intel, Intel invested quite a lot in the EU (specifically in Ireland). Probably more than AMD...

Re:AMD has built some big expensive fabs in German (0)

Anonymous Coward | more than 6 years ago | (#22394472)

If it was German authorities, I would agree. But being that the raid was done by EU authorities, I don't think national interests were a factor here.

What about Saturn? (2, Interesting)

Xelios (822510) | more than 6 years ago | (#22393362)

Saturn is another big electronics retailer in Germany, will they be raided too? Because like Media Markt they don't sell AMD either. Not surprising considering they're both owned by the Metro conglomerate [wikipedia.org] . Must make for some good 'competition' in the electronics market...

Re:What about Saturn? (1)

philipp-de (1154309) | more than 6 years ago | (#22393396)

Actually Media Markt and Saturn are owned by the same holding company (the "media saturn holding" ;))

Re:What about Saturn? (1)

Znork (31774) | more than 6 years ago | (#22394278)

Must make for some good 'competition' in the electronics market.

Well, one can seriously wonder about people who buy computer equipment at Media Markt. They're yet another of those 'trick the consumer into visiting our shop by advertising products we don't have for prices we wont sell them for then talk them into a sale' corporations that don't even dare list their prices on comparison sites.

I wouldn't trust them to sell me an electric toothbrush, nevermind a CPU.

More raids (1)

dj245 (732906) | more than 6 years ago | (#22393408)

The EU recently raided [eubusiness.com] several Classification Societies [wikipedia.org] belonging to IACS [wikipedia.org] for the same reason. Could they be flexing their muscles? How long has this agency been active?

Re:More raids (1)

Penguinisto (415985) | more than 6 years ago | (#22393578)

That's weird... aside from 'competition concerns', I don't quite grok the connection between ship inspectors (I know, but for brevity that's what I'm calling 'em), and the computer industry.

It's like there's some guy in Brussels with a blindfold and a great big dartboard, each segment of it tagged with an industry ripe for legal harassment or something.

I mean, if they're that eager to insure competition and to stamp out anti-competitive behavior, then why not abandon the formal niceties (and periodic fines) and just go raid Microsoft's EU offices outright? Seeing some of that get a public airing would be hella interesting.

/P

Re:More raids (1)

KokorHekkus (986906) | more than 6 years ago | (#22393814)

For at least a decade if not decades. It's best way to secure compromising documentation when there's more than two parties or several locations involved. One tip-off might throw parts or the whole case and with todays communications it's easily done. They're usually called "dawn raids".

From what I've read I think that it's often a tip-off that starts the investigation, then they investigate that company which quite often is helpful and turns on the partners because that will lessen the fines from the commission.

Confident? (1)

arizwebfoot (1228544) | more than 6 years ago | (#22393412)

Confident it has acted lawfully? As opposed to absolutely sure? Or some other such stronger words?

Me thinks maybe Intel got it's hand caught in the cookie jar and is now trying some slick lawyer way of denying that there were any cookies in the first place or some such thing.

Re:Confident? (1)

anti-human 1 (911677) | more than 6 years ago | (#22393722)

post bookmarked for later linking, thanks :P

Re:Confident? (0)

Anonymous Coward | more than 6 years ago | (#22395656)

IntelSpeak(TM) All the laws we checked (there may be some obscure ones we're sure we can weasel out of) said we can't do X, Y & Z. We are doing A, B, etc (which are similar to X, Y, Z but not the same so we aren't breaking the law)...

Wintel (0)

Anonymous Coward | more than 6 years ago | (#22393428)

...who whould have thought that both Microsoft and Intel were monopolies...

Printers? (4, Interesting)

JCSoRocks (1142053) | more than 6 years ago | (#22393444)

It's interesting that this is a big deal in the chip industry but not with printers... Everyone knows printers get sold for nothing and all the money is made on the ink and paper. You don't here about raids for selling printers below cost. I'd be interested in knowing what percentage of profit comes from CPU's versus graphics chips, chipsets, controllers and the myriad of other products that AMD and Intel make. If CPUs don't represent a significant portion of the income for either business - what difference does it make? In that case they're both obviously playing the printer game where their CPU is priced cheap so that you'll buy their chipset, graphics, etc chips too.

Re:Printers? (5, Interesting)

dasbush (1143709) | more than 6 years ago | (#22393622)

Everyone knows printers get sold for nothing and all the money is made on the ink and paper. You don't here about raids for selling printers below cost
Since it is generally accepted by all printer manufacturers that there is no money in printer, but rather in the ink, all the companies are doing it. In fact, since there are more than two companies doing this practice and surviving (even thriving) then it clearly is not a monopoly. If there were only two printer companies in the world, and the much larger one started selling ink for nothing, then the analogy would be comparable.

That said, you raise an interesting point about where Intel/AMD make their money. Is it in the CPU or the Mobo's/Video Cards/etc that are optimized to work with the CPU?

Re:Printers? (1)

Anne Thwacks (531696) | more than 6 years ago | (#22393776)

The raid does not prove they are guilty, but it may provide evidence!

If the suspicions is of price rigging through threats to media markt, then perhaps there will be incriminating e-mails.

OTOH, We dont need incriminating e-mails to know that Lexmark are guilty - why not just fine them - a lot - I'd love lower taxes!

What is it supposed to achieve? (2, Insightful)

sane? (179855) | more than 6 years ago | (#22394028)

I mean, come on. Its well known that governments will attempt to physically raid companies in search of the evidence they don't have. This is a high tech firm. Surely any sensible CEO would ensure that any questionable docs were held securely in another (corrupt) country, behind heavy duty encryption and only accessible by remote session.

Its not as if there would be a vast number of them, and the skills to make this invisible to the raiding agencies are not likely to be in short supply in somewhere like Intel.

All you can assume is that these raids are a show of force, not seriously expected to deliver anything of value.

Historical Monopolistic Practices (2, Insightful)

foxalopex (522681) | more than 6 years ago | (#22394128)

There were several articles about a year ago about Intel limiting shipment of CPUs to retailers who dared to sell AMD products. This was back when Athlon64 was king of the hill and P4's were terrible. Sadly, I'm not sure if much came out of that. It may be for this reason that the newer AMD chips are not as great. AMD may have never gotten the extra profit it was entitled to make the next better generation of chips. Seeing how slow most governments are to respond this may be a response to that initial complaint. On the other hand, I seem to recall Germany loaning a huge amount of money to AMD to build a chip fab there. Maybe this is a way of ensuring their investment was sound? Personally I think Intel should get fined anyhow. AMD needs a little help to make sure they survive. If AMD bites the dust we all loose in a big way.

Re:Historical Monopolistic Practices (1)

FishWithAHammer (957772) | more than 6 years ago | (#22394500)

Personally I think Intel should get fined anyhow. AMD needs a little help to make sure they survive. If AMD bites the dust we all loose in a big way.

If AMD dies, someone else will take their place. Intel has done nothing that other industries don't do and punishing them for making better chips than AMD and exploiting that advantage is immoral. (Because that's what this really boils down to--AMD is not as equipped for survival as Intel is, and is suffering for it.)

Where'd they get 20Bn (0)

Anonymous Coward | more than 6 years ago | (#22395078)

for the fabs?

And these had better be built quick because if you're three years late, you'll never catch up.

Over and Over Again (1)

Anonymous Coward | more than 6 years ago | (#22394266)

How many times does Intel have to go through the same investigations? Intel has been repeatedly cleared of wrongdoing. They have enough lawyers to know what is legal and what isn't. I don't think its worth the risk to break the law.

Oh and I don't know how much help the raid is going to be, unless Intel gives them access to email servers and document storage servers.

Here come the storm troops (1)

Carlaann (979557) | more than 6 years ago | (#22394642)

All those who've wanted more policing, well here ya' go. Thomas Vinje et al should be happy campers. Consumer harm should be the touchstone, without all the EC gobbly-gook reasoning. The storm troops there should just say we presume market share harms consumers, and then at least be intellectually honest.

Inside (1)

Teflon_Jeff (1221290) | more than 6 years ago | (#22395572)

Here's hoping there's some "Intel"ligence inside their legal counsel.

Because the EU likes to go for the jugular.
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