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

By Jane McEntegart
published

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.

Jane McEntegart
37 Comments Comment from the forums
  • 1raflo
    Thank god. Intel needs a little punishment ;)
    Reply
  • 1raflo
    Thank god. Intel needs a little reminder that they can't be the allmighty chipmaker that controls the market at their will ;)
    Reply
  • bustapr
    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.
    Reply
  • tenor77
    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.
    Reply
  • ceteras
    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.
    Reply
  • 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.
    Reply
  • dman3k
    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...
    Reply
  • tenor77
    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!
    Reply
  • 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?
    Reply
  • IzzyCraft
    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.
    Reply