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Intel's EU Troubles Could Lead to U.S. Attention

By - Source: Tom's Hardware US | B 37 comments

Over the last few weeks, the European Union’s antitrust beef with Intel’s behavior has come to a head. Today we learn that Intel could face similar trouble at home.

Earlier in the week, White House antitrust official Christine Varney said that the Bush administration “favored extreme caution” in enforcing antitrust policy. Varney went on to say that the Justice Department “will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers.”

Channel Web today reports that this, coupled with Intel’s impending EU fine could mean that the company will have similar problems in the United States. "I think it's tremendously important. I think the EU will provide a road map for enforcement in the U.S.," Channel web cites David Balto, a Washington, D.C.-based antitrust attorney and former policy director in the Federal Trade Commission's Bureau of Competition as saying. According to CW, Balto said the Obama administration's Monday pledge to crack down on antitrust behavior also could give Intel pause.


The European Commission, believes Intel’s pricing practices were an attempt to drive AMD out of the market, and will this week determine the fine to be paid by Intel. Intel denies 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 maintains that its actions were within legal boundaries.

Tomorrow is fingered as the day when the EU will decide how much Intel should be fined and speculation suggests it will be a record amount. Stay tuned, folks.

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  • 1 Hide
    1raflo , May 12, 2009 3:23 PM
    Thank god. Intel needs a little punishment ;) 
  • 6 Hide
    1raflo , May 12, 2009 3:25 PM
    Thank god. Intel needs a little reminder that they can't be the allmighty chipmaker that controls the market at their will ;) 
  • 4 Hide
    bustapr , May 12, 2009 3:35 PM
    Dang, intel's been digging that hole deeper for itself in the last few months losing millions of dollars in demands and gigantic problems such as these. As a result people have slowly moved away from intel and have gone to AMD's caring hands. They better take care of this before things get worse, like stopping six-core developement.
  • 3 Hide
    tenor77 , May 12, 2009 3:38 PM
    The problem with anti-trust laws is they are unevenly enforced and therefore some companies are in a never ending grey zone. Not to mention that an adminstration can be lax while the next one will retroactively try to punish those actions that happened prior to their adminsistration.

    No sympathy for Intels actions here, just stating that they allowed this practice and they either need to hold universal standards *cough*Apple*cough* or just go completely free market and let them go at it.
  • 1 Hide
    ceteras , May 12, 2009 3:59 PM
    There are two sides here, it's not just intel. How about the manufacturers? They should have been fined also, for playing intel's game.
    Perhaps intel will go on just "fine", refining their monopolist tactics, and nothing will ever change.
  • -5 Hide
    Anonymous , May 12, 2009 4:01 PM
    I buy Intel because their chips/products are usually top notch. Same reason why I didn't buy a Hyundai when opposed to a Mazda RX8 someone was selling for the same price due to losing their job. Even if the Mazda was more expensive, still would have bought it.
  • 2 Hide
    dman3k , May 12, 2009 4:31 PM
    tenor77No sympathy for Intels actions here, just stating that they allowed this practice and they either need to hold universal standards *cough*Apple*cough* or just go completely free market and let them go at it.

    Ok ok... it's not news that Apple is pure evil...
  • 4 Hide
    tenor77 , May 12, 2009 4:44 PM
    dman3kOk ok... it's not news that Apple is pure evil...


    If you're under 18 (percent market share) you won't be doing any time.

    Hey come on out and play!
  • 3 Hide
    ta152h , May 12, 2009 4:47 PM
    I'm much less inclined than the rest of the people posting to be happy about this.

    If Intel has so much control over the market, why did they lose market share when they had inferior processors? Why did they make so much money, and allow AMD to make so much money? If they were trying to put AMD out of business, they could have priced things very low and accepted much lower profits, but they never did. In fact, AMD is still around, and outside of ATI, has no reason to even exist with the poor processors they create. Yet, Intel lets them exist by pricing their own processors in a way that allows AMD to still exist, despite selling processors that are significantly slower than Intel's previous generation, and a lot larger as well.

    Intel knows they will never be the only processor maker in the world, and it is far better for them to have AMD around, then other possible scenarios. The most obvious one would be IBM buying AMD, and this would create HUGE issues for Intel, since IBM has excellent design resources, and excellent manufacturing technology.

    The reality is, when Intel made a bad processor (Prescott), they lost market share. When they made a good one (Conroe), they gained it back. Considering the other advantages Intel has, including software, and much better supporting products and manufacturing technology, I would say the market reacted pretty normally.

    If you wanted an AMD based computer, you could get it, and it was functionally identical to an Intel based one, except for trivialities like performance, power use, etc..., that really are not very important to the average consumer. This as opposed to Microsoft and Windows, which if you were to get a competing product, would get very different functionality and a very different user experience. The difference in productivity could be remarkably greater than the difference between processors, in most cases.

    AMD is not going anywhere. They might get bought, but they will not disappear. Intel is not stupid, they'd rather compete with AMD than IBM after they bought AMD. Heck, IBM was going to buy Sun. You think they wouldn't buy AMD if the price were right? Getting out of the PC business made it even more natural. You don't think Intel fears this?
  • -4 Hide
    IzzyCraft , May 12, 2009 5:01 PM
    Lol what harm to the consumer! lol super unlikly it will have any problem in the US. US only goes after monopolist that sell crappy products or over priced products, but when comparied to amd the closest competition they are doing neither.
  • 5 Hide
    bourgeoisdude , May 12, 2009 5:06 PM
    Now more than ever, America needs to lead and not follow. "Following" the EU's example would be a bad move.
  • 3 Hide
    JMcEntegart , May 12, 2009 5:15 PM
    bourgeoisdudeNow more than ever, America needs to lead and not follow. "Following" the EU's example would be a bad move.


    You think it's okay for Intel to offer rebates to manufacturers who agreed to obtain the majority of their processors from Intel/pay them to either to delay or cancel the launch of AMD based products?
  • -3 Hide
    maigo , May 12, 2009 6:04 PM
    Intel is in trouble for overpricing their top of the line chips?
  • 5 Hide
    Anonymous , May 12, 2009 7:03 PM
    AMD is having a hard time making processors now because of lost profits from Intel's actions in the past- CPUs and fabs are expensive to develop. Intel didnt price there chips better than AMD, they paid (and still do pay) OEM's to keep AMD out of the market. It used to be more direct payments to hurt AMD but now they just do marketing and development funding tied to total units sold and other seemingly fair metrics which in the end still keep the OEM's from using AMD.
  • 0 Hide
    martel80 , May 12, 2009 7:29 PM
    Come on, people. A completely free market is unreal.
    Don't you see what happened when they let the rating agencies, investment banks, mortgages, hedge funds and whatnot loose?
    This counter-measure was set to protect you, the customer, and deter the company from unfair practices.
    $ billion means next to nothing to the EU budget (for those "OMG thieves!" folks).
  • -1 Hide
    sandmanwn , May 12, 2009 7:39 PM
    martel80Don't you see what happened when they let the rating agencies, investment banks, mortgages, hedge funds and whatnot loose?

    Thought that was what happens when Congress tells lending firms to give loans to poor people. Then pulls a 180 and says that it was lack of oversight.
  • -2 Hide
    m3kt3k , May 12, 2009 7:56 PM
    MAABBYY if AMD made something I wanted to buy. OHHH right that dosent enter into it.
  • 1 Hide
    scarywoody , May 12, 2009 8:09 PM
    I just hate that a "government agency" can fine and cripple a company.
  • -1 Hide
    papasmurf , May 12, 2009 9:17 PM
    These fines actually harm consumers, where is intel going to make up its lost money? With higher prices. It's not like the EU or the US is gonna hand those fines over to AMD to make things right.
  • -4 Hide
    ta152h , May 12, 2009 9:45 PM
    JMcEntegartYou think it's okay for Intel to offer rebates to manufacturers who agreed to obtain the majority of their processors from Intel/pay them to either to delay or cancel the launch of AMD based products?


    Did you think about this before you posted it?

    What company didn't sell a majority of Intel based computers???? Intel had to incent companies to do this? No way, they all did.

    Did you have a hard time finding AMD based machines? I surely did not. They were all over the place, and more and more were coming out.

    Intel would help pay for advertising, and that was tiered on how many machines the company sold. They don't have a right to do that? They can't base the amount of monetary assistance they give to other companies based on the number of processors they sell?

    I do not understand any of this nonsense. They have a right to make money, and do not have to play stupid and give things away. They never priced their products in a manner that would drive AMD out of business, and even gave them a license to make the processors instead of litigating them to death. Intel could EASILY put AMD under right now, if they priced their processors in a manner that would still make a profit, but much less of one. Penryns are much better than the junk AMD puts out, and they are much smaller as well. But, Intel just tries to make a good profit instead of pricing very aggressively.

    There are so many things that make no sense within the context of Intel trying to eliminated AMD. When things make no sense, normally the reason is they are not true.

    AMD gained market share when they had the better product. That's capitalism at its best. AMD made money when they had the better product. Also, the way its supposed to work. They do not make money now, because their current product is worse, by a good margin, than Intel's PREVIOUS generation, and a lot larger. Compared to the Nehalem, well, you can't compare it to the Nehalem, despite being the same size.

    AMD's problems are their products. The market has been working the way it should. Europe just needs more American cash. We didn't give enough after WW II with the Marshall Plan, I guess. It's disgusting.
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