Intel Facing Huge Fines from European Union
Those European Union Antitrust regulators are having a busy week, folks, and today reports suggest the EU could impose its biggest ever market-dominance related fine on Intel.
Early in March we reported that Intel could be facing fines from the European Union in relation to the company’s pricing model. It seems the European Union has a big problem with the way Intel has been doing business, in particular rebates to computer makers and retailers. The European Commission said Intel’s pricing practices were an attempt to drive AMD out of the market and was set to rule on whether or not the company should be fined.
The New York Times today reports that the size of that penalty is to be discussed by representatives from 27 European Union governments in early May. However, we wouldn’t be so jacked up about the money itself. Sure, it could be the EU’s biggest fine handed out ever, but previous reports suggest that the maximum fine allowed would be 10 percent of Intel’s revenue, which while unpleasant, wouldn’t exactly clean the company out. The New York Times cites legal experts as saying Intel’s fine could reach roughly €1 billion, or $1.3 billion. Intel’s annual sales were $37.6 billion in 2008. However, there is a distinct possibility that the EU could impose new rules in order to remedy Intel's actions. Former Commission official Michael Tscherny hinted at just that last month when he spoke to Reuters and said the European Commission could destroy Intel’s pricing model.
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.
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Good, AMD should of definitely got a lot more market share in the 2-3 years it dominated Intel with it's Athlon 64s. Intel had to use some sketchy methods to stop that.
Oh and before people call me a AMD fanboy, I'm using a i7 920 right now.
Business as usual.
EU, I don't know where to begin.....
I used Intel from 386 to Pentium II, then used AMD for Athlon and Athlon64, and I recently went back to Intel for Core2Quad and Core i7. I like both companies, but go with whoever offers the better chip that generation.
I just want them both to compete with their products, not underhanded business deals. Even if you hate AMD, their existance brings quality up and prices down for Intel chips.
AMD did not get market share because people like me had already invested in Intel hardware and were not willing to make a full conversion of our computers. Companies did not buy AMD hardware, because companies typically look for products that have a long reputation of reliability, and pure power is great, but if it does not work, it is worse than worthless to them. The typical time period for large companies to evaluate a new product before implementing is between 18 months and 2 years. Thus, any compnay that already updated the year before would not even be close to ready to change until after that entire 3 year period of domination is over. That is why AMD did not take market share, along with Intel doing the right things in its sales, which is lower prices to match the compitition.
Those business practices are consistent with how the Torah states that descendants of the tribe of David may treat businesses owned by gentiles... It all depends on what "law" you're following...
You think this is anything less than the EU robbing an American company for a billion dollars, think again...
AMD gets nothing out of this except, I told you so..
One other thing. Companies that sell products learn this early on. If you are not selling what people are buying, it does not matter what the cost to make it was. Thus, if Dell was selling a product that people did not want to buy (Intel), they simply would have gone broke with a huge inventory of (Intel). AMD has to sell it's product, and that means convincing customers to buy it's products over Intel's. That is a PR thing, not a Dell thing. It is not Dell's job to convince customers to buy AMD's products. Dell's customers for the most part get to tell Dell what to build. Same goes for HP and every other computer seller.
Good Job!!!! Go the EU competition is good for all as long as the playing field is even.
Good for the EU. I've got nothing against Intel. Generally they've been good corporate citizens making decent products and releasing technical data & assisting with open source drivers for their hardware.
However, anti-competitive / monopolistic business practises cannot be excused. Compete on the merits of your product, not on the size of your wallets.
You think this is anything less than the EU robbing an American company for a billion dollars, think again...AMD gets nothing out of this except, I told you so..
Smartest comment I have seen so far. AMD will get nothing but a "it should be ok now" out of the deal. IF...big IF Intel does pay the fines, the EU will absorb most if not all of it. This isn't about fairness to them. It is about money.
It's not about robbing the poor American corporation, the article say so:
"It seems the European Union has a big problem with the way Intel has been doing business, in particular rebates to computer makers and retailers." so it's not about who's processor is bigger it's about the way Intel has been doing business with OEMs or big retailers, to favor their products instead of AMD. And if Intel is found guilty of such practices then you've got only Intel to blame for it's loss in profit.
PS: I wonder if a European corporation would have done the same in the States, would the comments read: America is robbing an European company.
Ignorance is bliss
first microsoft, now intel, god dambed pinko communists.
they first messed up the health sector and now the technology sector.
we are going from healthcare for everyone to computers for everyone.
socialist bastards, damb you all to hell. ;-)
I agree, Europe is floundering and now they are suing every major foriegn corporation. This is just a ploy to steal money for their bloated socialized governments.
Exactly roofus, don't know why anyone else hasn't talked about it. Where does the money from these 'fines' end up? Oh, that's right, into the EU's pocket, not the company that was most affected by the other companys practices. If it's true that Intel did underhanded business I think that some rectification should take place, with AMD getting the boost because they were screwed, not the EU.
"Gif moneyz pl0x" ~EU
"No, and for that, no more processors for you..." ~Intel
Milk every cent out of American corporations, they say.
Intel did use some foul practices in the old P4 days. I don't think they have those rebates to big OEMs now, but I do now that they use to hire reps, don't know through who but it wasn't actionlink, who would try and meet with the big chain stores as well as the local small shops to push Intel products. Didn't seem to do much more than hand out promo material, but that all seemed to stop around the time this anti competitive legal stuff started.
I'm not sure how this really makes sense. Any fines collected by the EU from this suit won't be going straight into AMD's pockets, despite their claim that they are doing it due to unfair pricing models and business practices against AMD. The only thing this will trigger is a delay in price drops on Intel's part until they make up the difference. With their domination on the upper mid-high market, there is no competition (and unfortunately won't be for quite some time
). It seems like a poor method to collect some extra cash to fund some other stupid government program.
#!$% bureaucrats.
It looks to me like the EU is just trying to call foul for the sake of drawing in revenue for themselves. I find it hard to believe that the EU is just "trying to keep everything fair" for AMD. Intel is just doing business, and they should be able to do business in any way they see fit as long as they aren't breaking any *WRITTEN* laws.
Between them suing Intel and Microsoft, they seem to be very fine-happy.
Thank god Wal-Mart stays in America, they'd be getting reemed in Europe.
So the prevailing opinion here is that, it is okay for a the bigger company to pay to have their competitions goods not reach market. Just clarifying because it seems that way to me.
If US had laws against stupid corporate greed, the economy wouldn't have crashed.
Monopolies are bad. With the fines, EU only wants to keep intel from doing it again. At least it worked with Microsoft.
LOL, this is just the EU playing politics... like everyone has said. They aren't trying to keep it fair, they just want some money, that's all. Don't worry, here in America, if we do this green tech and industry, once we ship it over there, it will get fined too. Thats what the EU does. They have become very good at stealing from someone, and when caught say, OMG look theres a robber over there! Assholes.
"So the prevailing opinion here is that, it is okay for a the bigger company to pay to have their competitions goods not reach market."
Yes... that is the prevailing opinion here. Welcome to life. Not everything is always "fair". Sometimes you are better than everyone else, Sometimes the other guys just suck. Sometimes you deserve to win. Sometimes you deserve to get paid more. You Communists/Socialists can continue to whine and connive your way to having your kids get trophies for showing up to games and every child graduates whether or not they put in any work... but until you learn the facts of life and the way business works all that is happening to you is YOU being deceived by those people doing things for "your good" while they get rich and everyone else gets poor.
"Yes... that is the prevailing opinion here. Welcome to life. Not everything is always "fair". Sometimes you are better than everyone else, Sometimes the other guys just suck. Sometimes you deserve to win." Sometimes you deserve to get paid more.
Agreed.
You Communists/Socialists can continue to whine and connive your way to having your kids get trophies for showing up to games and every child graduates whether or not they put in any work
My stuff is mine! I am not a communist\socialist. No kids, and I'd rub it in your face if won. As for graduating empty vessels, not for it.
... but until you learn the facts of life and the way business works
You must have some sort of mafia connections.
all that is happening to you is YOU being deceived by those people doing things for "your good" while they get rich and everyone else gets poor.
You lost me here... If I understand correctly Intel is trying to ensure that you get the best experience on your PC (Something for your good). therefore that makes it okay for them to make sure you can buy only their products..(they get rich) at increasingly higher prices (you get poor).... You've made your point. I don't know shit, but apparently you don't understand what you know.
Wea Americans have the greates scammers an thiefs. Enron, Madoff, etc.. Why so many people are so choked that Intel Might have done this? If its true EU its just looking for their share, after all intel made way more money with this stunt than waht EU may be charging.
And America is so squeaky clean...? Don't get me started!
I'm sure all those top of the line multi-billion dollar(general term) a year home based computer OEM's based in the EU lost tons of money to Intel over this...NOT
Or maybe it was the IT / business class OEM's that took the hit...wait a minute business class computers don't use in any significant way AMD based servers because of years upon years of AMD producing inferior math co-processors, unacceptable failure rates and the inability to string together multiple processors with a sizable L1/2 cache.
If any country/region has a beef with Intels business model I would think it would be China/Taiwan and not the effectively non PC producing EU.
Good, AMD should of definitely got a lot more market share in the 2-3 years it dominated Intel with it's Athlon 64s. Intel had to use some sketchy methods to stop that. Oh and before people call me a AMD fanboy, I'm using a i7 920 right now.
AMD would've increased their market share, but they couldn't produce to meet the demand. Uncertainity of supply makes OEM's nervous...
You can tell the EU agenda by the lack of any investigation into the European distributors who ACCEPTED these rebates and went along with the "anti-competitive" behavior. Funny how such a moral part of the world would have companies that would go along with the rebates - could they not have turned them down? Where is their blame? Apparently the commission can easily turn a blind eye on the the EU companies TAKING PART IN, AND BENEFITING FROM, the 'anticompetitive behavior'.
Are any of these retailers being fined? NO.
Are any of these retailers being asked to give back the rebate money that was anticompetitive? No, of course not - that is money in the EU that can be taxed later!
So while folks can argue the EU is doing the right thing... where is the action on the other 1/2 of the story (the particpating EU distributors/retailers)?
Good, AMD should of definitely got a lot more market share in the 2-3 years it dominated Intel with it's Athlon 64s. Intel had to use some sketchy methods to stop that. Oh and before people call me a AMD fanboy, I'm using a i7 920 right now.
Did you ever stop to think about the fact that AMD had a much smaller manufacturing capability compared to Intel? They couldn't produce enough chips to feed the market demand. If you can't then companies go elsewhere.
Thats a big factor. But the EU just doesn't like American companies TBH. Look at what they have done in the past: MS and next up will be Google. Not because Google had the better and still best search engine, no but because they are the best and hold more of the market share. Just watch.
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.
Sure it's possible that they've made those deals, but imo they don't really matter. Most any reasonably big company will exclusively buy intel desktop and workstations by default. We all still remember how messed up a system could become when we started buying athlon 64's and all the professional software started working slower, or did unforseen things. I'd wager we haven't bought a single amd desktop since 2006 or so, perhaps even late 2005 when the amd problems related to autodesk (autodesk's fault, not amds) hit our company. Anyway, servers are a different story. But the majority of systems bought by companies will be intel.