Intel CEO is lying now

UPDATE: Intel CEO: We Do Not Offer Conditional Rebates
Dow Jones
May 13, 2009: 01:05 PM ET

(Updates with comments from Intel, additional background, updated share price.)

By Jerry A. DiColo

Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- Intel Corp. (INTC) Chief Executive Paul Otellini said the chip maker doesn't offer conditional rebates to its customers, responding to the European Union's ruling against the company.

"The allegations essentially come down to Intel granting conditional rebates where the conditions weren't just volume based," Otellini said in a conference call. "Intel strongly disagrees with this decision. We do not have those conditions in our contracts."

Early Wednesday the EU fined Intel $1.44 billion - the largest ever assessed for monopoly abuse - and called for changes in the way the company sells the chips used in most of the world's PCs.

The company has said it will appeal the decision.

Intel shares were recently up four cents to $15.25.

Otellini said Intel plans to abide by the EU's decision as it moves forward with the appeals process, but won't know what specific actions will be needed until Intel officials peel through the roughly 500 page ruling.

The EU said Intel engaged in anti-competitive practices by threatening to withdraw rebates it offered to large computer manufacturers to pressure them to buy all or most of their chips from Intel rather than rival Advanced Micro Devices Inc. (AMD).

Addtionally, the EU said Intel paid computer makers to delay the launch of AMD-based products and paid a retailer to sell only Intel-based machines.

Otellini said a "significant amount of evidence" was disregarded by regulators that demonstrated Intel had not been involved in anti-competitive actions.

"There is a preponderance of evidence that we believe is exculpatory, including statements from our customers," Otellini said. Some of these documents, he said, were uncovered as part of the discovery process related to a separate lawsuit filed by AMD in Delaware.

The EU said in a statement that many of the illegal actions were uncovered through e-mails, formal requests for information and statements made to the EU from other companies, though the rebates were not made explicit in Intel's contracts.

The actions, the EU said, were employed to limit competition and harm customers.

"It's hard to imagine" how customers were harmed, Otellini added, telling reporters, "I don't think a customer is going to put himself at a disadvantage by buying inferior or costly products."

Nevertheless, Otellini said the ruling wouldn't influence the competitive dynamics of the PC chip market, because customers will continue to expect better performance and lower costs.

"There's nothing in this ruling that reverses Moore's Law," Otellini said, referring to the idea proposed by Intel co-founder Gordon Moore that the number of transistors placed on a single computer chip will double about every two years, lowering costs.

-By Jerry A. DiColo, Dow Jones Newswires; 201-938-5670; jerry.dicolo@ dowjones.com

(END) Dow Jones Newswires
05-13-09 1305ET
Copyright (c) 2009 Dow Jones & Company, Inc.

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Yawn...

SSDT

Same stuff, different thread

If not Intel, then it's MicroSoft.

Yea, thats my fave quote from them. How then do they explain Pentium4 sales?

AMD would do the same. No CEO is going to admit they screwed people over in a press release.

Actually, earlier they as good as admitted it. I remember one quote in the original article were Intel just said that they didn't "hurt anyone" but not that they didn't do it. Hopefully they've learned their lesson now.

While I agree to some point its easy to explain the Pentium 4s high amount of sales. Intel had easily 3-4 times more FABs than AMD had. That means 3-4 times more chips can be produced to be sold since OEMs do need to fill orders fast and can't always wait for AMDs next load of CPUs.

As for the thing, some interesting things pop up. it seems that Intel has some evidence the EU is not willing to use and as well the EU even stated that the contracts never explicitly stated that anything was part of the agreements. but they take the word of a OEM.

I just wish all the documents would be made public, including the ones Intel has for evidence from their customers (channels and OEMs) so we could get the real story and not the word of someone in another country whos government just bought 100million worth in PCs using AMD and as wells has a bit of special interest (Germany).

I don't like it when it seems one sided and in this case it does. I'm all for fair trade but if the EU is not accepting actual evidence and has certain special interests in it its seems unfair in the end.

I love this argument that what really happened is AMD couldnt produce enuf chips. IF thats the case, why would Intel be paying OEMs to not launch AMD lines, it would seem they wouldnt have to...