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EU exec set to fine Intel on May 13

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May 7, 2009 6:33:31 PM

EU exec set to fine Intel on May 13

* Reuters, Thursday May 7 2009

BRUSSELS, May 7 (Reuters) - The European Commission is set to rule next week that the world's largest chipmaker, Intel Corp , breached antitrust rules and will fine it and order changes to how it provides rebates, sources said on Thursday.

Sources familiar with the case told Reuters the Commission was expected to make its decision on May 13 during the EU executive's weekly meeting, based on a recommendation by Competition Commissioner Neelie Kroes.

The Commission declined to comment.
(Reporting by David Lawsky)

http://www.guardian.co.uk/business/feedarticle/8495243

More about : exec set fine intel

May 7, 2009 6:56:03 PM

Now for the first round of appeals...



...*yawn*...


At least this has given me a new sig.
May 7, 2009 11:53:23 PM

Hey baby, do you work for Intel? 'Cause you got "Fine" written all over you. said:
Hey baby, do you work for Intel? 'Cause you got "Fine" written all over you.


ROFL

Very lame, very geekish, but I like it.
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May 8, 2009 12:53:34 AM

Man the EU is just way too controlling. Remember all the crap with Microsoft? Don't Europeans have the exact same freedom's to purchase whatever they want as Americans do. If you don't like the product or company, purchase something else and don't support them!
May 8, 2009 8:45:18 AM

The problem with that is that Intel does its rebates in such a way that even if an OEM were to get 10,000 AMD chips for free, it would STILL be cheaper to buy 10,000 Intel chips instead.
a c 76 à CPUs
May 8, 2009 9:46:10 AM

boonality said:
Man the EU is just way too controlling. Remember all the crap with Microsoft? Don't Europeans have the exact same freedom's to purchase whatever they want as Americans do. If you don't like the product or company, purchase something else and don't support them!


Europeans have the same freedoms as Americans do EXCEPT the freedom to be ripped off by unethical and illegal business practices
a b à CPUs
May 8, 2009 10:31:21 AM

And yet they are anyway. Windows "N" editions didn't sell that well, but what can you expect when they were sold alongside and at the same price as a normal version? Hmm... Less for the same price? That will sell real well.
May 8, 2009 10:28:16 PM

EQPlayer said:
The problem with that is that Intel does its rebates in such a way that even if an OEM were to get 10,000 AMD chips for free, it would STILL be cheaper to buy 10,000 Intel chips instead.


Proof?

Outlander_04 said:
Europeans have the same freedoms as Americans do EXCEPT the freedom to be ripped off by unethical and illegal business practices

You mean as opposed to being ripped off by unethical and illegal businesses, Europeans are instead being ripped off by the government itself? Yeah.

Windows "N" edition reduces the consumer satisfaction by forcing them to go out and find a solution for internet and media player, rather than just simple plug and play. I don't see how that's "not being ripped off".

With everyone yelling Microsoft being anti-competitive, no one says a damn word about Apple. You can only use Apple's hardware with Apple's OS, Apple's productivity suite, and Apple's media players. If you break that formula by even one bit, tada! Here comes the legal threats from Apple.

Yet when Microsoft bundles a media player with their Windows, suddenly its anti-competitive?
a b à CPUs
May 8, 2009 10:38:27 PM

The proof you're asking for forms the backbone of AMD's case against intel. They have already been found guilty in Asia over the same thing.

Intel haven't even denied it, same as they didn't deny it in Asia.

What happened was, AMD offered tens of thousands of cpu's to Dell for FREE and dell refused to take them. Why? Because intel had already made a deal with Dell that prevented Dell from taking more than a certain amount of AMD cpu's at ANY price.
May 8, 2009 10:57:22 PM

jennyh said:
What happened was, AMD offered tens of thousands of cpu's to Dell for FREE


Doesn't that action alone, make AMD even "more guilty" than Intel?
a b à CPUs
May 8, 2009 11:17:13 PM

exit2dos said:
Doesn't that action alone, make AMD even "more guilty" than Intel?


They only did it after Dell refused to take their cpu's at normal prices, then knockdown prices, then seriously knocked down prices.

AMD have the documents, they have submitted them to the EU. Dell refused something like 100,000 free Athlons because intel had already made a deal preventing Dell from taking more than a certain amount from AMD.

The reason why this is bad for the consumer is like this -

Take 2 companies, one has $10bn in spare cash, the other 'only' $5bn. The second company can make better and cheaper chips than the first.

The first company makes a deal with (some say threatens) the major pc sellers. That deal is simple - take 50,000 of our cpu's at x price and we give you 50,000 at rock bottom prices. The catch is, you can only take 10,000 of our competitors cpu's, no matter what price they offer.

Now, company one stands to lose $5bn with this tactic, but company two stands to lose a lot more because they cannot sell more than 1/10th of their cpu's to the major pc manufacturers. Company two loses billions in unsold cpu's, gets into horrible debt and has to start laying off thousands of people - Europeans I hasten to add - because of company one's illegal marketing. Company one finds itself with increased market share and can pretty much dictate the prices at will from that point onward. The consumer loses in the long run.

The EU is never going to stand for that and neither should anyone with a sense of decency. Anyone who actually believes it's the EU flexing its muscles should do themselves a big favour and google AMD's case vs intel in the EU. Unlike most legal documents, it is surprisingly easy to read although like most legal documents it's pretty long and boring.
May 8, 2009 11:30:03 PM

jennyh said:
The proof you're asking for forms the backbone of AMD's case against intel. They have already been found guilty in Asia over the same thing.

Intel haven't even denied it, same as they didn't deny it in Asia.

What happened was, AMD offered tens of thousands of cpu's to Dell for FREE and dell refused to take them. Why? Because intel had already made a deal with Dell that prevented Dell from taking more than a certain amount of AMD cpu's at ANY price.


There are a lot of explanations as to why Dell didn't take AMD's CPUs. However if you think AMD is the only victim here, you're sorely mistaken.

What Intel did, as far as I know, is to offer rebates to system integrators for purchasing a certain amount of processors, and the continuation of rebates if SIs continue to purchase Intel processors. While that alone is not illegal, Intel did threaten to increase pricing above market value if SIs purchase certain quantity of AMD chips. Therefore Intel is being prosecuted for this reason.

AMD on the other hand also violated the anti-competitive law by offering CPUs below cost. I'm surprised that they even offered this information, since that alone could incriminate them, which may results in prosecution.

However, one of the biggest reasons Dell did not go for AMD CPUs is not mainly because of Intel's illegal behavior, but rather because AMD was proven to be very unreliable at supplying the quantity demanded by SIs. If any of you remember when the first K10 was launched, Dell actually had several server lineups with AMD chips. However they were removed a month to two later because AMD was unable to provide the chips needed. Aside from that, other SIs (HP included) removed their lineups because AMD was favoring channel sales at the time, while ignoring the OEMs.

There are reason why AMD is still the smaller player in the market today, and Intel being an anti-competitive player is just a minor one.
May 9, 2009 12:15:49 AM

I'm unfamiliar with the details of the EU case (the commission has not exactly made it easy to follow what's going on in their closed-door proceedings), but at least in the US case AMD's assertion is not that Intel threatened to "increase pricing above the market level" if OEMs bought AMD parts. In fact, what they claim is that the number of PCs sold per quarter was so predictable that Intel could name a number that was 9x% of the predicted number of PCs sold as their rebate target and OEMs would try to hit that number with all Intel parts so they could get the rebate yummies. Only then, the assertion continues, would they consider selling AMD parts, allegedly leading AMD to lose market share.

The US case is to a very large extent based on the perceived legality or illegality of this practice. You could argue it either way ("Intel was gaming the system" / "Where in antitrust legislation does it say you can't offer rebates if your predictive volume model is too good?"), and it will be interesting to see what will happen in the actual ruling-- if AMD's interpretation were adopted, it would be precedent-setting. It would essentially say that in very predictable markets (how is this defined?) the market leader would not be allowed to offer volume-based rebates because they could thereby assure themselves of a piece of the pie before the competitors got a chance. That could impact a lot of companies.

US antitrust case law generally targets whether the consumer is adversely impacted, whereas outside the US antitrust generally targets whether competitors are adversely impacted. If the facts of the case are similar in the EU to what they are in the US, expect any differences in ruling to be a result of this dichotomy.

Disclaimer: I'm not a lawyer, I just read the claims of the case and am trying to interpret them into English.
a b à CPUs
May 9, 2009 12:22:47 AM

intel used the oldest trick in the book and gave the OEM's no real choice. Either they accepted intel's terms or they themselves risked going out of business if their competitors did and they didn't.

If HP took up intels bribe and Dell didn't, Dell stood to lose out a lot more. In the end, they all took the only option they could and that was to take intel's bribe money. Something like 38 companies agreed to intel's demands - that is why AMD lost billions in the space of 2-3 years, not because of lack of chips or anything like that.

The only problem is, the EU can't fine intel enough to rectify the size of the crime. They will hit them hard, but the damage is already done so it's not like intel really care.
May 9, 2009 12:31:15 AM

yomamafor1 said:
However, one of the biggest reasons Dell did not go for AMD CPUs is not mainly because of Intel's illegal behavior, but rather because AMD was proven to be very unreliable at supplying the quantity demanded by SIs. If any of you remember when the first K10 was launched, Dell actually had several server lineups with AMD chips. However they were removed a month to two later because AMD was unable to provide the chips needed. Aside from that, other SIs (HP included) removed their lineups because AMD was favoring channel sales at the time, while ignoring the OEMs.

There are reason why AMD is still the smaller player in the market today, and Intel being an anti-competitive player is just a minor one.


Precisely.

Whether Intel may or may not have violated EU regulations, I don't know, since I don't know exactly what the EU regultions are. In a free market system like the US, I can't see where intel has crossed the line. The often used analogy about McDonalds using Coke exclusively comes to mind. However, the EU is more of a free maket/quasi-socialistic mix. If Intel did actually violate their laws then, yes, they should be fined.

Intel may be guilty but they aren't getting a fair, unbiased chance. As I've said elsewhere:
Quote:
IIRC, the only fabs Intel has in Europe are the ones in Ireland. EU as a whole, has been fighting Ireland since last summer, when the Irish rejected the Lisbon Treaty (Silly Irish - they put the matter to a vote among its people, rather than forcing acceptance like the rest of the EU). Now, the EU plans on forcing Ireland to comply: http://www.dailymail.co.uk/news/worldnews/article-10547...
Of course, the EU would never be so petty to rule against Intel to hurt Ireland, would they?



The EU's Intel investigation was just a takeover of the investigation that Germany was performing on Intel. The Germans are still at the spearhead of the investigation and haven't been recused from the ruling in this case even though AMD has been repeatedly subsidized by the German government.

Conflict of interest? Nah, I'm sure the EU is interested only in fairness.


The US investigation Hector is referring to was brought up by New York state. Seems the investigation was begun shortly after AMD was granted all the tax breaks to build it's fab there. New York is the only state that AMD/GF is building a fab, and, to my knowledge, is the only state taking actions against Intel.

Coincidence? Has to be.




I'm not inferring that Intel has never done anything wrong, but I am implying that the regulating bodies all have ulterior motives for finding Intel guilty.


As far as AMD goes, I can't see where Intel's actions has hurt them. As Yomama has pointed out, during the time period in question, AMD has been fab-constrained. They could barely keep up with demand for the market they had.

Additionally, OEMs like Dell would have to supply chipsets and RAM for AMD systems. I'm sure Dell has bulk purchasing power, and it would have cost them more for DDR just for the AMD systems. Do you think it was just a coincidence that Dell didn't carry AMD until Brisbane? At 65nm, AMD could produce more CPUs, so supply should've been more abundant. Plus, Brisbane used DDR2.

AMD is just using Intel as a scapegoat. AMD had the lead, but couldn't produce enough to grow their market substantially. During this time, AMD was profitable, yet they did nothing to improve their product line. They grossly overpaid for ATI. They intentionally released a faulty chip (Yes, I do believe they knew of the TLB bug when they released. I can understand not catching it on Phenom - but they had to have caught it on Barcelona. It locks right up on many virtulization tasks, and I don't believe they would release a server CPU without testing virtualization.) They've intentionally overstated the capabilities of their products. They've had yield issue (Do you believe X3 was by design?) They keep falling behind on node points - with every new node, more CPUs per wafer which means that each CPU costs less to produce. They ignored the Atom, which is becoming one of the best-selling platforms world-wide, and now AMD has to scramble to try to get into the market.

I could go on, ad infinitum, on how AMD keeps shooting themselves in the foot (I won't even touch on their new way of measuring TDP), but I think I can sum up all of AMD's problems into 2 words: "Hector Ruiz". It's bad enough that he ran Motorola into the ground, but with AMD, he's more focused on behind-the-scenes deals than he is with the technologies. I honestly believe that if Jerry Sander's was still in charge, AMD and Intel would be a true Duopoly - with each having 50% of the market.

Dirk seems relatively competent, and hopefully Hector leaves completely. They finally have a good platform with PhII and the 4XXX series. Hopefully Dirk will be more like Sanders, and not like Hector - which could "Ruiz" everything.
May 9, 2009 12:35:58 AM

archibael said:
US antitrust case law generally targets whether the consumer is adversely impacted, whereas outside the US antitrust generally targets whether competitors are adversely impacted. If the facts of the case are similar in the EU to what they are in the US, expect any differences in ruling to be a result of this dichotomy.


That's a good way of putting it, and it sheds a lot of light about this case.
a b à CPUs
May 9, 2009 12:49:01 AM

Oh please, the EU fine intel to get back at ireland and what was that, the Germans are in collaboration with NY state in order to bring about the 4th reich led by Hector Ruiz?

Seriously just look at what you're writing.

They don't need to fine intel to 'get back at ireland', that's just ludicrous. There are a lot of monopolies out there who aren't being fined by the EU - a lot more than are being fined. The one's who are being fined are being fined for good reason.
a b à CPUs
May 9, 2009 1:00:52 AM

exit2dos said:
That's a good way of putting it, and it sheds a lot of light about this case.


They are both the same when it comes down to a monopoly, ie the consumer loses in the end. You only need to look at the gpu market currently to see what actual fair competition does for the consumer.
May 9, 2009 1:13:47 AM

jennyh said:
Seriously just look at what you're writing.


Seriously, just read what I'm writing. :sarcastic: 

1) If you're familiar with the Lisbon Treaty, Ireland and the EU - you would know how petty the EU can be.

2) My point about Germany and New York are completely seperate, and at no point did I imply any "collaboration". My point is that in the EU case, it is a German investigation involving the competitor to a German subsidized company. Germany has its own interest in this, so it should be recused from this case.

3) Again, in no way am I saying that Intel isn't guilty. However, I am questioning the biases of its accusers, as well as, questioning any impact Intel's alleged activites had on AMD.
a b à CPUs
May 9, 2009 1:24:59 AM

Not really, Ireland benefits to the tune of 10bn euros a year from EU subsidies. I think the EU could find better ways to punish the Irish if that was their plan...

As for German subsidies, AMD's main fab is in Dresden so of course it's going to get government help when it needs it. Just the same way that the US has been bailing out how many lenders and car manufacturers recently? It's not some German plot to hurt intel, they are just looking after their own workforce.
May 9, 2009 4:51:32 AM

jennyh said:
As for German subsidies, AMD's main fab is in Dresden so of course it's going to get government help when it needs it. Just the same way that the US has been bailing out how many lenders and car manufacturers recently? It's not some German plot to hurt intel, they are just looking after their own workforce.


There, you said so yourself. Since AMD has two fabrication plants in Germany, of course the Germany wants to protect its investment and workers. In order to do so, Germany would of course have to pursue the prosecution of Intel, which may net several billion dollars, in which Germany can reinvest in AMD. No matter how you slice it, Germany clearly has the conflict of interest like E2D says, and should excuse itself from the case. The similar case goes for NY.
May 9, 2009 4:56:20 AM

jennyh said:
intel used the oldest trick in the book and gave the OEM's no real choice. Either they accepted intel's terms or they themselves risked going out of business if their competitors did and they didn't.

If HP took up intels bribe and Dell didn't, Dell stood to lose out a lot more. In the end, they all took the only option they could and that was to take intel's bribe money. Something like 38 companies agreed to intel's demands - that is why AMD lost billions in the space of 2-3 years, not because of lack of chips or anything like that.

The only problem is, the EU can't fine intel enough to rectify the size of the crime. They will hit them hard, but the damage is already done so it's not like intel really care.


Nope, you're incorrect.

Sure, the OEMs can stand to lose more if they refuse Intel's offer to not acquire any AMD chip, but since AMD processors were in high demand of that time, so if AMD can supply OEMs and channels with enough chips, OEMs could actually stood to gain, since it will inevitably force Intel back to the bargaining table.

The main reason AMD was not able to acquire more market share at the time because of their own fabrication limitations. They only had two fabs churning out chips at the time, and simply could not meet the demand. Originally they planned for an expansion of the fabrication plant (Fab. in NY) back in 2005~2006, yet Hector chose to purchase ATI instead of continuing to pursue the expansion of manufacturing capacity.

2006, was the same year AMD lost their lead in the processor race, and had to hand the crown back to Intel. As a result, while Intel was to blame for their petty actions again AMD, it was AMD themselves who couldn't expand on their successes.
a c 127 à CPUs
May 9, 2009 7:25:03 AM

jennyh said:
intel used the oldest trick in the book and gave the OEM's no real choice. Either they accepted intel's terms or they themselves risked going out of business if their competitors did and they didn't.

If HP took up intels bribe and Dell didn't, Dell stood to lose out a lot more. In the end, they all took the only option they could and that was to take intel's bribe money. Something like 38 companies agreed to intel's demands - that is why AMD lost billions in the space of 2-3 years, not because of lack of chips or anything like that.

The only problem is, the EU can't fine intel enough to rectify the size of the crime. They will hit them hard, but the damage is already done so it's not like intel really care.


Actually the reason why AMD lost so much money the past 10 quarters is because they haven't had a lead in the CPU market, bought ATI for way to much money and have been taking hits from that purchase. 4.8Billion when ATi was worth a small amount of that.

And don't get me wrong. I love ATI, always have and always will but they were not anywhere near that amount in net worth. But the owners who sold ATI are fat and happy now while AMD hurts from the purchase.

I remember reading an article a while back how when AMD was on top with K8 they decided to say "Screw You" to the OEMs and goo for the big bucks in the channels where they could set their own prices. Mainly because they could not manufacture enough CPUs for everything while Intel could. With OEMs you usually tend to have to lower the profit per chip because in the end the OEMs deal, they don't just buy. Thats why you can get a cheap end PC for less than you can build. Its only the gaming PCs that are cheaper to build since the companies try to make more off of them.

TBH, with Dell Intel and them signed a exclusivity deal for the Pentium 4 era which actually ended in 2004 or 2005, when Michael Dell returned to the lead. He was actually the one who decided on his own terms after that to not take up AMD YET. thats why it took Dell till recently to start offering AMD platforms. That and now that AMD has a actual platform, they can finally offer them for a good price instead of Dell having to go buy each thing seperately from each company thus costing them more money.

jennyh said:
Oh please, the EU fine intel to get back at ireland and what was that, the Germans are in collaboration with NY state in order to bring about the 4th reich led by Hector Ruiz?

Seriously just look at what you're writing.

They don't need to fine intel to 'get back at ireland', that's just ludicrous. There are a lot of monopolies out there who aren't being fined by the EU - a lot more than are being fined. The one's who are being fined are being fined for good reason.


Actually Hector himself was a horrible CEO. Its just sad that he is the head of the board now and still holds a lot more power than he should have really.

And the thing is that you would take AMDs word for it but something that makes sense such as fining intel to get back at Ireland doesn't? The EU is not all that great and is out for money. Thats why they fined Microsoft and forced Microsoft to release a blank OS yet have not gone after Apple yet. Mainly because Apples profits in relation to Microsofts is like comparing a mom and pop store to Wal-Mart. Just not enough to go after.

I am willing to bet though that the EU will go after Google next. Its been reported that they are looking into it. But you can't truly blame Google for having the best search engine, can you? Or will there be some twisted justification to it? And will the EU demans a blank and useless search engine so that people can choose more freely since they are obviously stuck only using Google.

See my point? People have never been restricted to using anything that comes with Windows. In fact Vista itself makes it even easier to set affinities to programs you want. The included is for those who don't know any better.

yomamafor1 said:
Nope, you're incorrect.

Sure, the OEMs can stand to lose more if they refuse Intel's offer to not acquire any AMD chip, but since AMD processors were in high demand of that time, so if AMD can supply OEMs and channels with enough chips, OEMs could actually stood to gain, since it will inevitably force Intel back to the bargaining table.

The main reason AMD was not able to acquire more market share at the time because of their own fabrication limitations. They only had two fabs churning out chips at the time, and simply could not meet the demand. Originally they planned for an expansion of the fabrication plant (Fab. in NY) back in 2005~2006, yet Hector chose to purchase ATI instead of continuing to pursue the expansion of manufacturing capacity.

2006, was the same year AMD lost their lead in the processor race, and had to hand the crown back to Intel. As a result, while Intel was to blame for their petty actions again AMD, it was AMD themselves who couldn't expand on their successes.


This is mostly correct, but didn't Core 2 Duo come out in 2005? And then the Core 2 Quad Q6600, first quad, came out in 2006 with the G0 Stepping in mid 07? Cuz I bought mine at the end of 07 when the B3 steppings were still around.

Overall I think if Intel did in some way break the laws, then great fine them. But we as normal people only have what someone says.

But if you take what E2D has said and actually think about it there is more to it than AMDs claims that Intel forced OEMs to do this and that. I mean the fact that they shrugged OEMs off and went for the more preffered channels in and of itself makes AMDs claims shakey.

And if AMD did at any point offer chips below cost or even lower that is illegal in the US and plenty of places. If so and they are showing some proff then they as well need to be prosecuted.

And I do agree that Germany needs to stay out of it. There is a conflict of interests. Its like if you are a judge with stock in the company being prosecuted. Conflct of interest. or the reason why you can't work at Wal-Mart and K-Mart at the same time. If you have any interests in any part of it you should have no say since its obvious that you will be persuaded without actually looking at the evidence in a fair way.

Then again since Germany is part of the EU, the EU itself has interests in it. Its kind of hard to take the EU seriously if part of them has intersts for one of the companies in the battle.
a b à CPUs
May 9, 2009 8:06:04 AM

FAB 24
Location: COUNTRY KILDARE, LEIXLIP, IRELAND Production Capacity:

They have three overseas plants ... including one in Ireland.

Wonder if they make four leaf clovers there?

Wafers/Month 30000
Company Origin: US Wafer Size: Wafer Size 12
Node: 0.13 Technology: CMOS Cu
Future Fab: No 200-mm Effective Capacity:


List ... bit old sorry bout that:

Wafer Fab Plants

Leixlip, Ireland (Fab 10, 1994; Fab 14, 1998, 24, 2000)

Lachish-Kiryat Gat, Israel (Fab 18, 2000)

Jerusalem, Israel (Fab 8, 1985)

USA

- Chandler, AZ (Fabs 6, 1980-2000, Fab 12, 1997; Fab 22, 2001)

- Livermore, Ca (Fab 3)

- Mountain View, Ca (1668-76, "1st Fab")

- Santa Clara, Ca (Fabs 1, 1971 & 2)

- Colorado Springs, Co (Fab 23, "Rockwell")

- Hudson, MA (Fab 17 "DEC Fab 6")

- Rio Rancho/Albuquerque, NM (Fabs 7, 1983; 9.1; 9.2; 11)

- Aloha, Or (Fabs 4, 1976-97 ; 5, 1978; 15)

- Hilsboro, Or (Fabs 20, 1999)

- Fort Worth, TX (Fab 16, 2000)


Wafers/Month 67500
Product: MPU

Still a lot more in the US.
a c 127 à CPUs
May 9, 2009 9:08:28 AM

^That list is a tad old. Intel just built another FAB in Chandler next to the old one and I am sure they have built more.

But I wounder @ 45nm how many CPus each Wafer produces using 200MM. And isnt Intel using 300mm now?

Either way by comparison Intel can produce many many more CPUs than IBM or AMD. In fact is one wafer produces 2500 Atoms +/- then 10000 wafers of that would be 25,000,000. So in 12 months they would have 300,000,000 Atom CPUs easily.

Wow.
!