WSJ weighs in on EU/Intel

[Scotteq]

....and it appears that 'We Are Not Amused...'


Source article:
http://online.wsj.com/article/SB124337851597556133.html

The latest demonstration comes from Europe's bustling trustbuster, Neelie Kroes. Her $1.45 billion fine levied on Intel is vaporware in the first place, since collection would occur years from now only if a court agrees. Not a whit of due process has yet taken place: Ms. Kroes's agency acts as prosecutor, judge and jury. One day the media will figure out that findings delivered under such circumstances are not a judicial outcome, and not deserving of the news fanfare they now receive.

Intel's competitor, Advanced Micro Devices, along with their customers, are cast as victims of Intel's practice of using volume discounts, rebates and loyalty programs to induce (allegedly) the Dells and Hewlett Packards of the world to restrict their purchases of AMD chips.

Already this is a falsification of the chip business. Intel's volume rewards do not control buyer behavior, but do reflect the reality that Intel is the industry's dominant supplier of capital and productive capacity, requiring sufficient volume to justify the increasingly astronomical cost of designing and mass-producing the next-generation of chips in line with Moore's law.

One and all benefit, including AMD, because this "upgrade cycle" then gins up sales of PCs and software.

But Intel's customers also depend on the continued existence of AMD to discipline Intel's pricing. This fact goes a long way toward explaining AMD's ability to survive and raise capital despite legendary production snafus and gigantic losses. Chip buyers have a strategic interest in buying AMD chips regardless of any Intel volume discounts. Dell, HP, IBM, Sun, Cray and others lined up two years ago to buy AMD's ill-fated "Barcelona" chip. Intel customers all, they were set to roll out 50 new systems based on the AMD chip -- which AMD failed to deliver.

 

[roofus]

this should spark some interesting debate lol

 

[jimmysmitty]

It should but the problem I have with a lot of this "fne" business is that everyone just looks at what the EC/EU says. They don't look outside of that. They don't remember or know that AMD overpaid for ATI causing massive debt.

They don't realize that the main EU country pursuing this, Germany, has a AMD FAB thus jobs and special interests or any of the many other facts like AMDs lack of FABs.

Hell it makes me wounder why people are never questioning why the Governments allow for cities and such to sign contracts with Cable TV or internet providers blocking other competetion out of the area causing them to pay more. Or the electric companies as well.

it all seems one sided to me. No monopolies for this but we don't care about that.

Sigh. Welcome to the modern world. Hypocrasy at its best.

 

[JAYDEEJOHN]

Sure glad the author knows more than all of us. If AMD wins its lawsuit, will the author place a retraction, and say hes sorry?
Whats more interesting, at least in the quote, was the omission of the other 2 findings, those evile Koreans and Japanese!!!
Spewing on about AMDs shortcomings, all the while, finding Intel innocent, and being found guilty 3 times, but only mentioning the heavy fine guilty action,no....no... I wouldnt say it was a biased article....no

 

[jennyh]

Yep, funny how nobody mentioned the Korean and Japanese AMD workers and fabs, jobs and special interests.

Oh wait, there are none.

Also, there is no 'main EU country pursuing' intel. Try reading wiki every so often.

"The Commission operates in the method of cabinet government, with 27 Commissioners. There is one Commissioner per member state, though Commissioners are bound to represent the interests of the EU as a whole rather than their home state."

 

[JAYDEEJOHN]

Heres my problem with the author. The WSJ is a conservative paper, and I lean that way also. But just like they hate socialism, I too also hate it. But in todays economy, Im glad the government is helping, while the so called "true" conservatives hate it.
So too with this article. The author and its readers (mainly) hate any kind of government intervention, and thus his response, as the EU is meddling in business, and has no right to, according to their core beliefs.

 

[enigma067]

"While it's perfectly legal for companies to offer sales incentives, the law takes a more jaundiced view of rebates offered by companies with dominant market positions, because the payments may serve to lock in a monopoly."

http://www.businessweek.com/globalbiz/content/may2009/gb20090511_514564.htm


Like it or not, Intel is guilty.

 

[fazers_on_stun]

Sure glad the author knows more than all of us. If AMD wins its lawsuit, will the author place a retraction, and say hes sorry?
Whats more interesting, at least in the quote, was the omission of the other 2 findings, those evile Koreans and Japanese!!!
Spewing on about AMDs shortcomings, all the while, finding Intel innocent, and being found guilty 3 times, but only mentioning the heavy fine guilty action,no....no... I wouldnt say it was a biased article....no

I've even seen some EU news sites complaining about the EU commission's lack of due process, and self-serving interest.

Now if it's true Intel paid OEMs to not use AMD CPUs, then I'd say they were anticompetitive and a fine is deserved. Probably nowhere near the $1.45B, as I have read that AMD's sales suffered mainly because they couldn't pump enough out of their fabs - they sold just about every CPU they could make. Also I suspect this Kroes person to be angling for a promotion and hence being a tough nut, sorta like a DA who wants to run for governor.

But just about all manufacturers use volume discounts and rebates. Just check your local auto dealer the last day of the month, and ask about the manufacturer's rebates if they sell X many autos that month. Absolutely nothing should be illegal about that, and giving a rebate to an OEM who passes part of the savings along to the customer, is hardly 'injuring' the customer, now is it?

I think we all knew what the EU commission findings would be, even before they raided Intel's offices and started collecting hearsay and innuendo as "evidence" of wrongdoing. Wouldn't get too far in a real court of law IMHO.

 

[fazers_on_stun]

Like it or not, Intel is guilty.

Oh well, no need for a real trial or anything like that - Judge Judy here has already pronounced the verdict.

 

[JAYDEEJOHN]

Prejudice can be proven in the EU findings, simply because of its location, and the EU "judges". While this is true, you cant separate where the judges are from, and the EU, and those ties, first, they werent setting precedence, and second, it doesnt mean theyre wrong either.
Its like crying over spilled milk