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EU Airs Out Intel's Dirty Laundry
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The European Union has laid bare the dirty details of its evidence against Intel, publishing emails and notes from Intel executives that show the company was actively trying to smother the competition.
Intel has long contested the $1.45 billion fine from the European Union's antitrust division and yesterday, the EU responded to the appeal Intel filed in July by making a "non-confidential version" of its ruling final.
So what do we know now that we didn't know before? When the EU announced its ruling before the summer, it said that Intel was guilty of anti-competitive practices but now, we're finding out just what Intel was up to and good gracious if it doesn't paint Intel in a decidedly unflattering light.
The EU release includes details of rebates with manufacturers such as Dell, Lenovo and HP. Check out the deets of some of the deals below.
Rebates paid to Dell from December 2002 to December 2005 were conditioned on Dell purchasing exclusively Intel CPUs. For example, in an internal Dell presentation of February 2003, Dell noted that should it switch any part of its CPU supplies from Intel to its competitor AMD, Intel retaliation "could be severe and prolonged with impact to all LOBs [Lines of Business]."
The deal with HP was a little different. HP was awarded rebates provided the company adhered to several unwritten requirements. First and foremost, HP was to purchase at least 95 percent of its business desktop system from Intel. Second, although HP could purchase the remaining 5 percent from AMD, this was subject to further restrictive conditions. These included only selling AMD-based business desktops to small and medium enterprises, only via direct distribution channels (rather than distributors), and on HP postponing the launch of its first AMD-based business desktop in Europe by six months.
An internal email from HP and dates September 2004 reads, "You can NOT use the commercial AMD line in the channel in any country, it must be done direct. If you do and we get caught (and we will) the Intel moneys (each month) is gone (they would terminate the deal). The risk is too high."
Similar restrictions were places on deals with Acer and Lenovo with the former postponing the launch of an AMD-based notebook from September 2003 to January 2004.
Check out the full release from the European Union by clicking here.
Source : Tom's Hardware US









Let's see the "EU is leaching money of the poor and righteous American company" argument their point now.
Wow that is some pretty dirty laundry..
i'm actually considering throwing away my core i7 after this article. thats it, i'm going all AMD next build. I SWEAR!!
Certainly some shady business practices for sure. Still maintain that a loosely coherent body like the EU has no basis for the fine.
intel the classic X Wife! Damn if you Damn if you dont!
Was there an actual need to release the details to convince someone out there that anti-competitive practices were being used? I mean in the computer industry has any company ever achieved the dominant market share in any segment without using these practices of rebates, volume discounts and volume licensing deals to extort "loyalty" out of the manufacturers.
I hope this results in more sales for AMD. It's not that I hate Intel, I'd just like to see more balance in the competition for the consumer's benefit. AMD deserves much more credit than their commercial sales reflects, and this story shows a major reason why.
..in fact this just pushed my over the fence. I'm going to order a Phenom II X4 965 to upgrade my 720 right now.
This is why my money goes to AMD when they have competing parts.
I hope this results in more sales for AMD. It's not that I hate Intel, I'd just like to see more balance in the competition for the consumer's benefit. AMD deserves much more credit than their commercial sales reflects, and this story shows a major reason why.
i completely agree with you, thats what i'm gona do from now on, i'll be purchasing AMD/ATI only products, and hopefully others will too, doing this on large scales will balance competition and therefore even intel dedicated fans will benefit. (LONG LIVE THE UNDERDOG)
I hope this gets published on television news so more than just the internet audience will hear about this. Intel will probably do absolutely everything in its power to keep this as low-profile as possible. It's time we finally start exposing our large shyster corporations for what they really are.
During 2003-2006 AMD had the Athlon64 lineup that was killing the Intel Pentium4 brand in all reviews and publications. AMD certainly deserves to get some of this rulings money in their pocket since Intel cost them lots of potential market-share with this obviously corrupt and illegal practices. Boy... I dont know how anybody could respect a company like Intel after something like this. Kind of makes you wonder also why their products are so unreasonably expensive.
Gee, I wonder why AMD never managed to get their fair market share, and accompanying funds for R&D during the Athlon64 heyday... Bulldozer might have made it to market already, and wiped the floor with Core i7.
F*#& you, Intel and your fanboys...
So, in light of this, I assume that the US Congress is going to investigate and deal with Intel accordingly? Or does Intel hire "lobbyists" to make "bribes/campaign contributions"?
ive always know in some way that intel was doing something nefarious when it came to their business practices. which is why i have stuck to amd products not just because they have better price to performance ratio but to also support a company that has been screwed and continues to be screwed.
Intel has been doing this since the AMD K6 days.
"Unwritten agreements." Uh... I guess good luck in court? That's why we sign documents instead of shaking hands and "agreeing" on terms. I signed a lease, didn't verbally agree to the lease terms with the leasing agent. A verbal agreement would be damn tough to prove in court. Good luck evicting me for violating an unwritten agreement. Then again, this is the EU, not the US court system.
I wonder how this will impact Intel's Developer Forum today through Thursday.
"Unwritten agreements." Uh... I guess good luck in court? That's why we sign documents instead of shaking hands and "agreeing" on terms. I signed a lease, didn't verbally agree to the lease terms with the leasing agent. A verbal agreement would be damn tough to prove in court. Good luck evicting me for violating an unwritten agreement. Then again, this is the EU, not the US court system.
Multiple sources or correlated testimony could probably suffice as proof of a non-verbal.
Your mention of luck is not needed however. The ruling has been made and the evidence did include the agreements. I'm pretty sure this was just the EU telling Intel where to shove their appeal paperwork.
... but to also support a company that has been screwed and continues to be screwed.
So we should all support the prostitues since they have been screwed and continue to be screwed. I for one am rooting for intel. Not because I think they are right, and not because I like them, but because I don't want the EU to get a Damned cent. Lets see... How much of our recent economic downturn could be funded if those funds weren't stripped away from US companies... AND, last time I checked, the party trying to bribe was not the only guilty party. Last I checked it was also illegal to RECIEVE bribe money. So why aren't HP and Lenovo, etc included? Didn't they recieve money in order to take part? Kind of a messed up argument that you only prosecute or attempt to fine one side of the problem. Kinda like trying to play on the see-saw by yourself. just a bit unbalanced.
Ultimately I don't see how Intel should be fined for offering rebates to OEMs for preferring Intel's products. Businesses do that all the time. Heck, cell phone companies are allowed to do it.
Really the blame falls on Dell, HP, and other PC manufacturers. They didn't have to accept the deal from Intel, but they wanted the rebates. Dell and HP had just as much power as Intel seeing as how Intel wouldn't sell any products if it weren't for them. They could have said, "Screw that. We'll just sell AMD products instead."
If the EU thinks that the exclusive deals are wrong, then they should be fining the OEMs as well. However, is it wrong for an OEM to use one brand exclusively over another? I wouldn't think so.
So, in light of this, I assume that the US Congress is going to investigate and deal with Intel accordingly? Or does Intel hire "lobbyists" to make "bribes/campaign contributions"?
Pretty sure there is going to be a anti-trust case next year in the US about Intel.
So we should all support the prostitues since they have been screwed and continue to be screwed. I for one am rooting for intel. Not because I think they are right, and not because I like them, but because I don't want the EU to get a Damned cent. Lets see... How much of our recent economic downturn could be funded if those funds weren't stripped away from US companies... AND, last time I checked, the party trying to bribe was not the only guilty party. Last I checked it was also illegal to RECIEVE bribe money. So why aren't HP and Lenovo, etc included? Didn't they recieve money in order to take part? Kind of a messed up argument that you only prosecute or attempt to fine one side of the problem. Kinda like trying to play on the see-saw by yourself. just a bit unbalanced.
well i dont support those companies receiving the funds cause i build my own pc and dont buy prebuilt ones and plus why shouldnt we support our local prostitutes.
everyone knows that AMD doesn't have the market share due to slow processors and overpriced GPUs whose drivers are buggy and flawed. Once intel comes out with on chip GPUs it will wipe AMD off the map while they are still using 45nm processes for the next two years, intel is already launching 32nm and plans to go 28nm in two years by the time AMD has filed for Ch.11 right on time, like a clock: TICK, TOCK, TICK, TOCK STOMP!!! I don't mean to be mean, but it is fact AMD is 5 bil in the hole and #6 on who is most likely to file for ch.11 by Forbes, so i wouldn't waste my money on a chip whose socket will be dead when the company dies?? it doesn't make sence! Does anyone remember VOODOO? they died in 1996 or so and tried to compete but didn't have the balls to backup their shat. Thats what happens to companies that fall behind!
Exclusivity contracts are very, very common in the business world and are even a necessity to control costs for suppliers, distributors, retailers, and consumers. The "problem" is that to what extent are these practices "wrong" for large companies aka "monopolies."
Just follow the chain. Intel, by contractually obtaining, a huge set percentage of a companies business guarantees reaching certain capacity, cash flow, and revenue. This, inturn, allows Intel to give rebates to Dell/HP not offered to non-exclusive partners and those not operating with these sort of volumes. This allows Dell/HP to be more competitive/larger volumes. The rebates help Dell/HP compete more competitively and target bigger customers and helps Intel because their biggest partners are more comeptitive. Distributors and Retailers get competitive pricing on well marketed "brand" product and can purchase from large companies that have significant infrastructure for both product and product support. Consumers gain the advantage of availability and product quality.
So remove the contracts and the chain is damaged. AMD wasn't/isn't capable of providing product at the scale/timeframe expected, Intel no longer offers rebates to Dell/HP because as volume goes down/costs go up. Distributors/Retailers pay more and in the end consumers may as well.
Interestingly, AMD could have simply created programs that offered Dell/HP the same volume with better pricing. But they couldn't (and cannot). Consumers (and the idiot EU) need to understand that business is more than just benchmarks in some game = desirability in the business-to-customer channels. Availability is huge as is guaranteed pricing. It doesn't matter how good your product is if it isn't available when the customer wants it.
Now Intel would have avoided some of this hurt if the contracts were volume based. i.e. "For X rebate Dell must purchase 25M Intel CPUs." Obviously we would be quite unfair to cast a blind eye at co-marketing and brand placement, mutually beneficial business arrangements for exclusive contracts, etc. The business world thrives on such and it is completely legal ... as long as you are not a massive company with significant marketshare and deep pockets. While I wouldn't argue that these contracts are always better for consumers, it would be wrong to argue they are always harmful. Likewise they can be quite beneficial to businesses and longterm industry health.
It would be curious to inquire of AMD and the EU if they have any exclusive contracts with any customer that gains them a benefit. I bet they both do and I bet in some of the case that it isn't completely in the benefit of the end consumer.
So we should all support the prostitues since they have been screwed and continue to be screwed. I for one am rooting for intel. Not because I think they are right, and not because I like them, but because I don't want the EU to get a Damned cent. Lets see... How much of our recent economic downturn could be funded if those funds weren't stripped away from US companies... AND, last time I checked, the party trying to bribe was not the only guilty party. Last I checked it was also illegal to RECIEVE bribe money. So why aren't HP and Lenovo, etc included? Didn't they recieve money in order to take part? Kind of a messed up argument that you only prosecute or attempt to fine one side of the problem. Kinda like trying to play on the see-saw by yourself. just a bit unbalanced.
Your argument is not even an argument. Of course the other intervening parties should be punished, not just Intel. But Intel should be punished. You don't actually make a point in your text.
Secondly, AMD is also a US company. In your vision, an american company can screw at will another american company, which could have funded your economic downturn in the first place had it not been screwed by Intel during the years AMD actually, objectively had the best processor.
If you like to buy other products to put in your computer case besides a CPU, you really should consider that a free market needs rules all over the world. I don't know if you can build a computer made from US made parts alone, but even if you could you would be severly restricted in your choice.
What happens in the US affects the rest of the world, and vice-versa. Remember how the current world crisis began ?
Competition is good for the consumers, and I presume that includes you. Unless you like to pay for an overpriced CPU, an overpriced GPU, etc.
Like I said elsewhere, lack of competition results in slow R&D, suboptimal products at high prices.
[citation]well i dont support those companies receiving the funds cause i build my own pc and dont buy prebuilt ones and plus why shouldnt we support our local prostitutes.[/citation]
If you start buying millions of processors a month and market their product to millions of consumers through joint advertising then you, too, can obtain significant rebates.
I have built every desktop I have owned since the 80s, but I find your point laughable. "Me, Me, Me."
@presidenteody
are you a fucking retard, AMD had the performance crown before the core2duo lineup hit in o6, so quite a bit of the time that AMD was getting screwed they were on top
and over priced GPU's, wow, you realize that the Radeon 4k series is one of the best price/performance, and since AMD acquired ATI the drivers have gotten much better, both NV and ATI now have about the same number of bugs
as for on chip GPU, yeah, enthusiasts will care about that, its pretty much their same crappy IGP, which loses to both AMD's and NV's IGp (though the stability of NV could be much better)
Ultimately I don't see how Intel should be fined for offering rebates to OEMs for preferring Intel's products. Businesses do that all the time. Heck, cell phone companies are allowed to do it.Really the blame falls on Dell, HP, and other PC manufacturers. They didn't have to accept the deal from Intel, but they wanted the rebates. Dell and HP had just as much power as Intel seeing as how Intel wouldn't sell any products if it weren't for them. They could have said, "Screw that. We'll just sell AMD products instead."If the EU thinks that the exclusive deals are wrong, then they should be fining the OEMs as well. However, is it wrong for an OEM to use one brand exclusively over another? I wouldn't think so.
You only have half a point there. The problem with your argument is that AMD didn't and still doesn't have the facilities to meet demand should HP, Dell, Acer, Lenovo, etc, start going away from Intel and moving towards AMD overnight. That kind of growth takes time, and AMD would surely be much more competitive, becasue they would have grown at a sustained rate, if for year after year Intel and the OEM hadn't done this kind of deal to prevent that from happening.
Inclined to go with AMD from now for all my customer builds, except the high end users that need the power of i7. Cant beat intel for pure performance though, irrelevant of business practices!
Multiple sources or correlated testimony could probably suffice as proof of a non-verbal.Your mention of luck is not needed however. The ruling has been made and the evidence did include the agreements. I'm pretty sure this was just the EU telling Intel where to shove their appeal paperwork.
It could, in Europe, and it appears that it has. Oh well, good for the EU? Another billion or so to fund a new railway or something.