Intel faces EU Antitrust regulator investigation
Sean Ridgeley - Monday, March 9th, 2009 | 11:16AM (PT)
Fine and pricing restructuring may be in order
Microsoft isn't the only one getting slapped around by the EU Antitrust regulators (a.k.a. the European Comission) -- Intel is also on the bill for flexing its power a little too much, endangering fair competition. However, a bigger worry on the corporation's mind no doubt isn't a large fine (up to 10% of its annual revenue), but a forced new pricing model:
"Will the Commission impose something that would destroy their pricing model, open up the market to competition and new entrants or to AMD? That is what they would be worried about, more than their reputation or anything else," said Michael Tscherny, a former Commission official, now partner at European affairs consultancy Gplus Europe.
Part of the scheming, the Commission says, stems from Intel's rebates, which they cite as an attempt to suppress AMD's share in the industry. Turns out Intel agreed to give out the rebates to computer makers (Apple?) so long as they obtained most or all of their chips from the company. Intel has denied as such, saying its conduct has been law-abiding and beneficial to clients and customers.
A ruling will soon be made; analysts are leaning toward's the EU on this one, saying this fine could top the one laid on Microsoft for a similar offence in 2004 at $500 million. The figure isn't expected to slow down Intel much, but act more as a deterrent.
"They fined Microsoft. Yes, it hurt their image, but it didn't hurt their cash balance and their market share is still almost at the same level," said John Dryden, analyst at Charter Equity Research in San Francisco.
Of course, operating system choices are limited on the PC, whereas processors, motherboards and the like are plentiful. If people buy less Intel as a result, maybe reputation will become a big worry, despite what Tscherny thinks.
http://www.neoseeker.com/news/10073-intel-faces-eu-antitrust-regulator-investigation/
Sean Ridgeley - Monday, March 9th, 2009 | 11:16AM (PT)
Fine and pricing restructuring may be in order
Microsoft isn't the only one getting slapped around by the EU Antitrust regulators (a.k.a. the European Comission) -- Intel is also on the bill for flexing its power a little too much, endangering fair competition. However, a bigger worry on the corporation's mind no doubt isn't a large fine (up to 10% of its annual revenue), but a forced new pricing model:
"Will the Commission impose something that would destroy their pricing model, open up the market to competition and new entrants or to AMD? That is what they would be worried about, more than their reputation or anything else," said Michael Tscherny, a former Commission official, now partner at European affairs consultancy Gplus Europe.
Part of the scheming, the Commission says, stems from Intel's rebates, which they cite as an attempt to suppress AMD's share in the industry. Turns out Intel agreed to give out the rebates to computer makers (Apple?) so long as they obtained most or all of their chips from the company. Intel has denied as such, saying its conduct has been law-abiding and beneficial to clients and customers.
A ruling will soon be made; analysts are leaning toward's the EU on this one, saying this fine could top the one laid on Microsoft for a similar offence in 2004 at $500 million. The figure isn't expected to slow down Intel much, but act more as a deterrent.
"They fined Microsoft. Yes, it hurt their image, but it didn't hurt their cash balance and their market share is still almost at the same level," said John Dryden, analyst at Charter Equity Research in San Francisco.
Of course, operating system choices are limited on the PC, whereas processors, motherboards and the like are plentiful. If people buy less Intel as a result, maybe reputation will become a big worry, despite what Tscherny thinks.
http://www.neoseeker.com/news/10073-intel-faces-eu-antitrust-regulator-investigation/
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