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

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11:00 AM - May 12, 2009 by Jane McEntegart

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.

Source : Tom's Hardware US

Talkback
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1raflo 05/12/2009 5:23 PM
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Thank god. Intel needs a little punishment ;)

1raflo 05/12/2009 5:25 PM
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Thank god. Intel needs a little reminder that they can't be the allmighty chipmaker that controls the market at their will ;)

bustapr 05/12/2009 5:35 PM
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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.

tenor77 05/12/2009 5:38 PM
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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.

ceteras 05/12/2009 5:59 PM
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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.

Anonymous 05/12/2009 6:01 PM
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dman3k 05/12/2009 6:31 PM
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tenor77 :
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.


Ok ok... it's not news that Apple is pure evil...

tenor77 05/12/2009 6:44 PM
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dman3k :
Ok 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!

ta152h 05/12/2009 6:47 PM
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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?

IzzyCraft 05/12/2009 7:01 PM
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bourgeoisdude 05/12/2009 7:06 PM
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Now more than ever, America needs to lead and not follow. "Following" the EU's example would be a bad move.

JMcEntegart 05/12/2009 7:15 PM
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bourgeoisdude :
Now 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?

maigo 05/12/2009 8:04 PM
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Intel is in trouble for overpricing their top of the line chips?

Anonymous 05/12/2009 9:03 PM
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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.

martel80 05/12/2009 9:29 PM
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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).

sandmanwn 05/12/2009 9:39 PM
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martel80 :
Don'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.

m3kt3k 05/12/2009 9:56 PM
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MAABBYY if AMD made something I wanted to buy. OHHH right that dosent enter into it.

scarywoody 05/12/2009 10:09 PM
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I just hate that a "government agency" can fine and cripple a company.

papasmurf 05/12/2009 11:17 PM
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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.

ta152h 05/12/2009 11:45 PM
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extrasalty 05/13/2009 12:01 PM
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Intel will be in red for the next few quarters, once their stock takes a nose dive after the fine. My guess is it will exceed $3 bn. And probably some more, when they try to buy some time through procedures.
I've been waiting for this fine for over 10 years- yeah, it's been that long. Back when, among other abuses, Intel threatened ASUS into not making AMD motherboards, and I had a hell of a time finding one for k7-850MHz. This fine has been long in the making and it's not about who has or had superior product. It's about using unlawful methods to achieve market dominance.
There is one thing that makes me more happy than Intel getting the fine- it's the fanbois who will in effect pay the fine :))))))

razzb3d 05/13/2009 12:21 PM
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AMD currently has the Phenom II 955, witch can compete with intel's i7 920. i know, because i own these 2 processors. Altought the i7 is ~ 10-15% faster in desktop apps and benchmarks, (mostly due to hyper-threading), the PII 955 is faster in games like Crysis (look up benchmarks - google is ure friend!).

Now i don't have a i965 to compare it to AMD's top end offering, but i imagine it can't perform much better than my 920@3333mhz, or @4000mhz (20x200@1,32v).

For extreme overclocking, the i7 is a BAD CHOICE. most top out at ~ 4300mhz, including the allmighty i965. On the other hand, the PII 955 runs at ~4,8ghz on air or peltier coolers, IF you have a good motherboard for OC.

On N2O, the i7 tops out at ~ 5200MHz if i can remember correctly. The PII 955 topped out @ 7.2GHz!!! of course, this is by far impractical, but speed of up to 5GHz have beem acheved with water cooling solutions using the PII 955. Also, did i mention that the 955 is a lot cheaper?

Now, i'm not a AMD fanboy (I own a i7 based sistem, one Q9550 a E8200, and one PII 955 based sistem), altought i tend to cheer for the underdog.

in my opinion, the only practical advandage Intel has over AMD is MARKETING and MARKET DOMINATION.

razzb3d 05/13/2009 12:26 PM
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p.s. - ta152h - you are CLEARLY not up to date with AMD's latest products. Pull your head out of ure butt and start reading up on the Phenom II 955 (witch beats the crap out of a Intel Q9550) both at performance straight up, and aspecially overclocking.

Remember, i own both a PII 955 and a Q9550. If you start flaming, i'll post screenshots! (Everest, Sandra, 3Dmark06 and Crysis Benchmark).

ag3nt smith 05/13/2009 1:16 AM
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razzb3d :
For extreme overclocking, the i7 is a BAD CHOICE. most top out at ~ 4300mhz, including the allmighty i965. On the other hand, the PII 955 runs at ~4,8ghz on air or peltier coolers, IF you have a good motherboard for OC.



Interesting you point that out. Yes the Phenom II 955 will catch up with the 920; it is a huge leap in taking Intel out of the #1 spot. However I do disagree with you on i7 overclocking. You have to OC an i7 a little differently but it doesn't take much. I was able to push my friends i7 965 to 5.02GHz (7 hours stable on Prime65) on a liquid cooling setup. I have thought of buying an i7 but I keep waiting for AMDs next move. Yes you can OC the PII 955 to 7.2 on LN2 (Liquid Nitrogen) [where do you get nitrous oxide?] however the average consumer won't use LN2. I applaud AMD in such an extreme OC; however I want something that will last more than a few hours. Yes AMD is cheaper and if you do look at performance/dollar the PII does come out on top. But current performance bases put Intel in the top spot. I'm not an Intel fanboi; but you have to go where the power takes you. I give AMD 3 years (if not sooner) to be in Intel's spot.

kjm15213 05/13/2009 1:24 AM
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You know I think it will be hard for Intel to avoid what has been coming in the US with the DOJ investigation that started under Bush. This article seems to gloss over the investigation that started under Bush that has really gone now where. I think that they might proceed with this case and find a judgment against the company, like other countries before the EU have done. The EU is not the first to find fault with Intel's business practices, so it not some problem with the EU.

I think a recent and good example is the release of the ION and how much of a problem NVidia is having getting their hands on the processor or Intel hypothesizing that they do not have the rights to develop chipsets for their processors since it outperforms the crap they sell soddered to these chips. Is that not be another abuse of their market power?

A similar veiled threat was leveled against AMD about the nondisclosed licensure of X86 technology. Where this ends up will be interesting since the manufacturing of these chips and license would bring pending legal action sooner than later. What would happen if they feel AMD is illegally making chips? How does this influence their market share? Intel would have a similar situation to Microsoft then I feel that got them in trouble for their monopolistic practices. I think they would have a hard time suing for enforcement that would require AMD to forfeit it's market share, leaving only Intel with the majority marketshare.

Anyway, whatever happens it seems pretty apparent that there is a big legal battle pending for Intel whether it be brought about by their own actions or by actions of others. The EU ruling will not really be any more significant than what happened in Korea or Japan as it relates to their US business practices. There may also be interesting implications for patents held by intel and whether anyone can truly hold something like the X86 rights that are so dominate in all aspects of a market. I think if something like this comes about it has major implications for all of the technological development in the US and significant may create revisions to patent laws.

Anonymous 05/13/2009 2:17 AM
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These fines have been a long long time coming.

Intel was directly paying companies to not sell amd chips. Thats completely illegal and they need to be held accountable.

Back when it was the p4 vs the athlon, had these illegal practices not taken place the cpu market today would be very different. AMD would have gained a LOT more market share then they did. Ya they gained some share when they had a better product(athlon vs p4), but it would have been a much bigger gain.

That may sound small.... But every action taken since would have been different. Im sure their balance sheets over the last 4 years would be drastically different. Its also very likely their chip would be further ahead in performance then it is now. The phenom 1 debacle likely wouldn't have taken place. Im guessing we would have seen the phenom 2 in its current form as the first phenom instead of the 2nd. Which means the phenom 2 we have today would likely be very close to the i7, instead of behind it.

Its hard to predict what things would have been like. But, its safe to say we would have seen much less red ink on AMDs books, and it not unresonable to predict they would be 9 months or so of development further along in their chips.

rooseveltdon 05/13/2009 2:29 AM
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m3kt3k :
MAABBYY if AMD made something I wanted to buy. OHHH right that dosent enter into it.


sandmanwn :
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.


actually congress did not force agencies to give loans to people who could not afford it,the bill you are referring too did not even cover the people that got screwed over by the banks and these mal practices started long before that bill,they started during the reagan era,stop watching fox news and get real.

starryman 05/13/2009 2:57 AM
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I'm so tired of the mamby pamby EU!!! While they may have some validity to their policies DON'T THINK FOR A MOMENT that they want to make a little cha-ching. Some how they weasel in to make some money off of an antitrust issue... how about the collect it and send those fines back to the US Government.

apache_lives 05/13/2009 4:14 AM
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heh wonder how many Intel processors and products the EU uses?

For every deal/contract (to supply/setup an office etc) it usually goes to the cheapest (lowest bidder) for the bulk work etc (same for everything in the world, militarty etc) - should they sue me for looking that direction (cheapest)? or the sales man lowering the price on a particular model? or the suppliers having that model cheaper then another?

jd13 05/13/2009 4:58 AM
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-1+

How come no one goes after Wally World for unfair trade practices?? They've killed all the mom & pop shops in a 20 mile radius of their stores...

demonhorde665 05/13/2009 5:04 AM
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-3+

ta152h :
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?




your article REAKS of fanboyism ..

AMD makes poor processors ????

poor processors would be via ,or cyrix

AMD make damn good processors.. jsut they are not the "top" conversly amd's processors are onlya bout 20% behind itnels in performance yet their top moedel proc cost hundreds less than intel's top model.

don't get me wrong i'm no fanboy , i use both intel and amd processors , but to say that AMD makes "poor" processors just shows your total lack of knowledge in this area. AMD processors are actually very good processors and handles all task well with little to no trouble , sure they are a tad slower than similar intel models , but they dont suffer ANY oft eh crippling issues that cyrix and via procesors do.


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