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Intel Hit With $1.45 Billion Fine From EU

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8:41 AM - May 13, 2009 by Jane McEntegart

The European Union has fined Intel a record breaking $1.45 billion in relation to antitrust charges against the company.

European Antitrust regulators have been reviewing Intel’s case for a very long time, believing the company’s pricing model was an attempt to drive competition out of the market. Intel denied the charges related to rebates offered as long as manufacturers agreed to obtain the majority of their processors from Intel as well as paying them to either to delay or cancel the launch of AMD based products. The company maintained its actions were within legal boundaries.

In a statement this morning, the EU’s Competition Commissioner says Intel “harmed millions of European consumers deliberately” and the fines shouldn’t surprise anyone. "Given that Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for over five years, the size of the fine should come as no surprise," said Neelie Kroes.

Intel on the other hand is not happy and plans to appeal the decision, claiming it “ignores the reality of the highly competitive microprocessor market.” The fine itself amounts to a mere 4.15 percent of Intel’s annual revenue ($38 billion in 2008), and given that the European Union is, by law, allowed to fine up to 10 percent of that figure, we’re a little surprised at the leniency of it all.

The decision comes amid speculation that Intel could come under similar scrutiny in the United States following resolute statements from the White House regarding anti competitive behavior.

Source : Tom's Hardware US

Talkback
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matt2k 05/13/2009 3:09 PM
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-4+

I hope this means lower prices all round :)
though it will likely only affect OEM builds n such. tis a pity.

and that is taking into account that intel will stop doing this...

matt2k 05/13/2009 3:10 PM
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oh and kudos to whover figured out how to remove that first post being a summary of the article. was starting to bug me

SneakySnake 05/13/2009 3:17 PM
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I really hope that AMD will finally be allowed back into the market now. Sure there CPU's aren't quite as good on the performance scale, but you get immense bang for you buck. The Phenom II 955 can hit 4 GHz without passing 1.5 volts

scook9 05/13/2009 3:25 PM
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+1 and +1. although I am dissappointed in Intel. Yes they make nice processors, but what the hell. If the EU ruling holds, there is NO way nothing will happen here in America. I don't want Intel pulling this shit here, but I don't want them running around nudered and scared either. They HAVE to appeal the EU fine regardless of amount - and yes they were lucky it was so "little" - because not doing so says they were guilty, just like prepaying a traffic ticket, it is admitting the guilt.

hikayu 05/13/2009 3:26 PM
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m3kt3k 05/13/2009 3:26 PM
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MountainFlip 05/13/2009 3:29 PM
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When the EU fines Intel, who is Intel actually paying the fine to?

randomizer 05/13/2009 3:30 PM
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scook9 :
If the EU ruling holds, there is NO way nothing will happen here in America. I don't want Intel pulling this shit here, but I don't want them running around nudered and scared either.


It's already happened in the US.

ShqTth 05/13/2009 3:31 PM
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AMD cpus could be awesome if AMD just had the cash comming in.

I say that AMD is competing pretty awesome for a company that has been kicked in the nuts. So if AMD just had those extra sales, well that would put amd back on track.


AMD had to do that wierd Fab thing becuase it lacked cash. AMD would still be a whole (not having to sell out their fabs in a wierd way)if they were not kicked in the nuts.

When the Athlon first came out AMD was increasing market share like crazy and yet for some reason they were stuck thanks to intel.
Could you imagine what AMD would be like today if Intel played fair?

ShqTth 05/13/2009 3:37 PM
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The scary thing about the EU as the EU is pretty big, is that the EU could impose import duties/taxes on Intel CPUs if it wanted to level the playing field. And that would affect a lot of countries/sales. Or if Intel doesn't pay the fine, it could ban the sales and import of Intel CPUs in the EU. Either way it would be a plus for AMD.

apache_lives 05/13/2009 3:38 PM
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ThePatriot 05/13/2009 3:39 PM
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The EU was very kind towards Intel: the fine could have been 4 billion (i.e. 10% of turnover). Just a fine to get their attention.
Intel awaits same charges in Japan and Korea; maybe US follows.
That will add up.
Chuckle.

bill gates is your daddy 05/13/2009 3:44 PM
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-11+

hikayu :
oh so this mean what ? stop marketing intel's latest chip and sell only crappy old chip ? come on ! it's nbot intel's fault AMD cant follow .thx EU , way to boost the darn market.



Are you retarded or do you take night classes on how to become a world-class douche?

"rebates offered as long as manufacturers agreed to obtain the majority of their processors from Intel as well as paying them to either to delay or cancel the launch of AMD based products."

This case has nothing to do with Intel marketing their latest chip or if you believe that AMD cannot keep up with Intel (imo they do). This case is about Intel essentially PAYING retailers to not carry AMD or delay release of AMD products. That's F'ed up right there.

AMD produces a great product. They make processors that do everything that Intel can do and AMD makes it more cost effective. Buy AMD and take that $100+ you just saved and put it toward a better GPU. Buy ATI and save some more. AMD is playing the game and playing it very well but you can’t ever get an Intel fanboi to admit that.

I like Intel products and have always supported them but this time I am building all AMD because I have enough intelligence to recognize a price bargin without taking a performance loss.

On that note. Tom, there is a review you can do. $1500 cap but underspending is encouraged and will count toward the final score - AMD/ATI vs Intel/Nvidia and see which produces a more cost effective setup.

akhodjaev 05/13/2009 3:45 PM
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nerdherd 05/13/2009 3:49 PM
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MountainFlip :
When the EU fines Intel, who is Intel actually paying the fine to?


I'd like to know this same thing...if the fine goes to the EU only then it's just a load of bull. Since they are fining them for hurting the "consumers" then either the money should go to those millions of consumers or the money should go to competitors as payments for lost revenue. Anyone know how it actually works?

roofus 05/13/2009 3:56 PM
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Food for thought here is that 1. AMD wont see but a meager token offering from this imposed fine. 2. Even IF Intel relents on their backroom deals with major OEM's that does not fix AMD's poor marketing and sales problems. If they do actually absorb a grand chunk of market at the end of this ( I highly doubt it but it is possible down the road) they also have to be able to fulfill orders on time and adhere to product release dates. They have been their own worse enemy in spite of Intel and their monopolistic tactics.

b33fcak3 05/13/2009 4:07 PM
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The EU would fine a maximum percentage of 10% if it needed the money for these so called deficiets. This is proven to be false exactly by the fact that they only fining a total of about 3.8% which suggestes a genuine fine instead of your proposed harasment of Intel.

And what would you possible have to say to Obama to make him consider talking to the EU, one of your country's main trading parterns over a measily 1.45 billion and ruining relations with their trade commision, thats just greedy and helps the world economy in no way.

superblahman123 05/13/2009 4:45 PM
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dark_lord69 05/13/2009 4:56 PM
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YAY!! F*ck intel and their high prices.

maximiza 05/13/2009 5:09 PM
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And in other news Intel lays off 10,000 people! This really won't fix anything. You will just get a richer career politican.

dman3k 05/13/2009 5:09 PM
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Hopefully, EU start being more fair about it's practices on Anti-Trust and go after Apple too.

Second thought, how did this case take so friggin long? When this case started, AMD had the best processors. Now, AMD's best isn't even close to Intel's best.

bill gates is your daddy 05/13/2009 5:19 PM
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MountainFlip :
When the EU fines Intel, who is Intel actually paying the fine to?



That is the issue is it not?

If the EU is saying that Intel has wronged AMD and imposed a $1.45 bil fine on Intel why shouldn't AMD get the money? What did the EU loose during Intel's monopolization? If their claim is AMD was treated unfairly in the market and lost sales due to this why is AMD not going to see any of the $1.45 bil?

We all know what happens in these types of cases. We see it all the time here in the US. Fine the tobacco industry...does the cancer laden individuals see any of the money? No. It goes to the state. Fine the car industry for unsafe manufacturing which caused accidents and deaths...do the survivors or families receive anything? No. It goes to the state. Fine any major corporation and not a single dollar will ever make it to the hands of the true victims of the offense. This is nothing more than a transfer of wealth. It happens daily in America, so often it is as common and seeing the sunrise and set during the course of a day.

trinix 05/13/2009 5:20 PM
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They make 4 billion profit and this year they see there billion dollars go down a bit. They won't get more jobs from that money.

Yes, it's nice, but it's only 0.6% of the EU's total spendings, so even if it helps, it in no way solves any big EU problems to pay things.

There are rules. If you can't fine someone who doesn't play by the rules, what can you do? Even if AMD killed itself, that's no reason why Intel can just ignore the rules. They didn't follow the rules that aren't only European rules, but are also in other countries in effect.

AMD had superior products, yet until very late no one touched them. You can call it bad marketing, but if you consider that Intel is a very dominant player on the CPU market, he is not allowed to give discounts for exclusivity. It's one of the rules they have to follow. The EU has proof that Intel made these deals, where they would virtually move AMD from the market, the best marketing strat won't win if your best offer is an unknown name (Intel Pentium meant PC in that time) and better price/quality, while Intel sells his products at a loss to keep you out of the market with exclusive deals.

AMD can now start a case in the EU against Intel and ask for compensation and it will be easier for them to proof their case.

So if we add it all up, if Intel doesn't like the fine, they shouldn't have cheated. They still made billions more than this fine anyway with their tactic and made AMD weaker now.

ceteras 05/13/2009 5:23 PM
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-2+

Dogs bark, but the caravan goes on.
Nothing will change, it will all go back to business as usual.

I'm amazed how still people can't see the facts as they are.
If Intel can kick their competitors in the balls, it's us who feel the pain in the end.
Once these competitors being eliminated from the market, intel would rise the prices for cpus, and what do we get? Fewer choices for all of us, and a higher price tag for Intel fanboys.

fulgore243 05/13/2009 5:34 PM
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millerm84 05/13/2009 5:34 PM
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The strange part of this is that if Intel had looked at each OEM's proposed retail sales for each year and sold them a solid number of CPUs at a discount biased on those numbers instead (ie HP thinks they can sell 100,000 units Intel says Sell 60,000 of our CPUs and get a percentage off) they wouldn't be here.

But delaying launches and such was a little on the stupid side.

My only question is now will the EU go after the OEMs. I mean Intel can offer all they want, but it's only illegal if it actually happens and both parties have to commit before that. So why isn't HP, Dell, or who ever it is not being fined in the manner?

yonef 05/13/2009 5:39 PM
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how much you say?
$1.45 Billion according to TH
$1.50 Billion according to TG Dayly http://www.tgdaily.com/content/view/42430/135/
$2.20 Billion according to CNN http://cnnwire.blogs.cnn.com/2009/ [...] rust-case/

vincevdc 05/13/2009 5:46 PM
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cablechewer 05/13/2009 6:05 PM
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-6+

The point is supposed to be that government represents the people. It sets rules on their behalf and enforces those rules on their behalf. In this case the government, on behalf of the people, has passed laws to ensure fair competition in the marketplace. The inherent assumption of both the people and the government is that if the playing field (marketplace) is level the people will win by having choices that are not unfairly dictated or mandated by a large corporate entity.

The only issue here *should* be whether Intel violated those laws that keep the playing field level. If they did then the government has the responsibility to collect a fine on behalf of their people (on the assumption that those people are harmed by violations of the laws). The money should not go to AMD or any other corporate entity. By going to the government it is, at least indirectly, going to the people and hopefully will be spent responsibly on programs those people value.

I know this whole post is hopelessly optimistic *sigh*. Politics, greed, ignorance and FUD will always have their parts on this stage as well.

ThePatriot 05/13/2009 6:06 PM
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oouch!!
This gotta hurt
Chuckle

bill gates is your daddy 05/13/2009 6:12 PM
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"Once final judgment has been delivered in any appeals before the Court of First Instance (CFI) and the Court of Justice, the money goes into the EU’s central budget, thus reducing the contributions that Member States pay to the EU."

AMD is wronged by Intel monopoly + EU fines Intel $1.45 bil = AMD gets $0.00

What is the reason behind this again?


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