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Intel Wins Appeal of Billion-Dollar EU Fine for Antitrust Actions Against AMD

Intel word logo
(Image credit: Intel)

Intel has won its appeal against a €1.06-billion-euro ($1.2 billion) EU antitrust fine from 12 years ago according to Reuters. The decision to impose the fine was annulled in its entirety by the same court that in 2014 had upheld the original 2009 ruling. 

A hearing at the EU Court of Justice before five judges

(Image credit: Court of Justice of the European Union)

The original case revolved around whether Intel had blocked AMD from the market by giving rebates to Dell, HP, and Lenovo if they bought at least 95% of their chips from Intel. The original case was one of the EU’s landmark antitrust decisions, but the EU General Court ruled on Wednesday January 26th that regulators made key errors when compiling the original case.

The court said the commission’s analysis had been “incomplete” when it originally fined Intel, and that it didn’t provide enough evidence to back up its findings of anti-competitive behavior. It had failed to show “to the requisite legal standard” that the contested rebates posed an anti-competitive risk.

The billion-dollar fine represented about 4% of Intel’s $37.6 billion in sales in 2008, according to figures from Bloomberg. The legal wrangling and multi-part appeal has continued non-stop for 12 years, including a rejection of the challenge in 2014, and various transfers between different levels of the court. In 2017, the EU Court of Justice, the highest level of bewigged legal authority in the EU, told the General Court to look at the case again.

In a statement, Intel said it wouldn’t be making a statement, as it was “currently reviewing the decision” and “will provide further comment when we have completed our initial review.”

Ian Evenden
Ian Evenden

Ian Evenden is a UK-based news writer for Tom’s Hardware US. He’ll write about anything, but stories about Raspberry Pi and DIY robots seem to find their way to him.

  • -Fran-
    I can't believe they can look back at that time, look at how OEMs and AIBs were captive of Intel and say "yeah, that's fine for competition". I'm sure their strongest argument is "but AMD could have done it as well!" and while true, it would've had the same or worst impact in their finances than this, as Intel still dominates the market and the mind-share.

    Sad result IMO. I hope they do revisit this.

    Regards.
    Reply
  • jkflipflop98
    I disagree. I think this was a silly cash grab from the outset.

    This rebate scheme happens all over the place, yet Intel gets singled out for it? If you go to Burger King you can't drink a Pepsi product because CokaCola gives Burger King the soda for free if they promise not to use Pepsi products as well. Funny enough, we have this deal with Pepsi in our own cafe. They give us the soda for free as long as we don't have any Coke machines on campus.

    AMD couldn't compete because their product sucked. Full stop. It wasn't because they were being held back by some rebate program from Intel. They simply didn't have silicon anyone wanted to buy. Now look at today's situation that proves this true. AMD started making something competitive and now they're climbing up the ranks regardless of any discounts, rebates, or anything else. Make a product people want and they'll come get it. Apparently if you can't make a chip worth a crap, go to the EU and cry sour grapes in hopes the other guy gets fined, I guess.
    Reply
  • -Fran-
    jkflipflop98 said:
    I disagree. I think this was a silly cash grab from the outset.

    This rebate scheme happens all over the place, yet Intel gets singled out for it? If you go to Burger King you can't drink a Pepsi product because CokaCola gives Burger King the soda for free if they promise not to use Pepsi products as well. Funny enough, we have this deal with Pepsi in our own cafe. They give us the soda for free as long as we don't have any Coke machines on campus.

    AMD couldn't compete because their product sucked. Full stop. It wasn't because they were being held back by some rebate program from Intel. They simply didn't have silicon anyone wanted to buy. Now look at today's situation that proves this true. AMD started making something competitive and now they're climbing up the ranks regardless of any discounts, rebates, or anything else. Make a product people want and they'll come get it. Apparently if you can't make a chip worth a crap, go to the EU and cry sour grapes in hopes the other guy gets fined, I guess.
    The difference is size and influence of the rebate.

    As a Corporation, when you offer rebates to AIBs and OEMs which don't have much cash to begin with to buy 95% of their CPU-based products to get a huge discount, that means most of the allocated budget for each line of products will be leaving any other competing components outside as the other supplier can't match the discounted price, even if doing the same. This is the equivalent of a poker match, when you go "all in" and the other party can't match you. Even Poker has rules about that. In this case Intel essentially "cashed out" AMD from even playing the round with OEMs and AIBs. This is what baffles me. This basically will set a very dangerous precedent for Companies with a lot of cash around that can easily sell at a loss until they leave competitors outside; this is also really hard to prove via accounting alone (maybe how Intel is getting away with it). Now, this is important for the CPU market specifically, as X86+Microsoft is like 95% of it in home and office computing. As always, it'll depend on the market.

    Regards.
    Reply
  • sivaseemakurthi
    Wow, its been going on for so long. Intel appealed again and again. I guess they were confident they didn't do anything wrong. I wonder if the perceptions changed with changing times. Intel literally gave away their socs for free to enter tablet market and no one said its wrong!
    Reply
  • artk2219
    jkflipflop98 said:
    I disagree. I think this was a silly cash grab from the outset.

    This rebate scheme happens all over the place, yet Intel gets singled out for it? If you go to Burger King you can't drink a Pepsi product because CokaCola gives Burger King the soda for free if they promise not to use Pepsi products as well. Funny enough, we have this deal with Pepsi in our own cafe. They give us the soda for free as long as we don't have any Coke machines on campus.

    AMD couldn't compete because their product sucked. Full stop. It wasn't because they were being held back by some rebate program from Intel. They simply didn't have silicon anyone wanted to buy. Now look at today's situation that proves this true. AMD started making something competitive and now they're climbing up the ranks regardless of any discounts, rebates, or anything else. Make a product people want and they'll come get it. Apparently if you can't make a chip worth a crap, go to the EU and cry sour grapes in hopes the other guy gets fined, I guess.

    Flat out, no. This lawsuit dates back to 2003 through 2006, basically the time of the P4 to just before Core 2, you remember the P4, that pile of literal hot garbage? Or Itanium, the 64bit only cpu that barely got market share? Intel sure as hell was pushing manufacturers to not create or sell products based on AMD's chips by literally giving their chips away or threatening to sell them at exorbitant prices if they didn't decide to limit or refuse to even make products with AMD's chips. Their previous CEO even stated that the fines they got were a slap on the wrist vs how much money they made \ were able to keep by keeping AMD locked out of certain parts of the market.

    Or you could just read this lovely article:
    https://www.nytimes.com/2009/11/05/technology/companies/05chip.html
    Reply
  • jkflipflop98
    artk2219 said:
    Flat out, no. This lawsuit dates back to 2003 through 2006, basically the time of the P4 to just before Core 2, you remember the P4, that pile of literal hot garbage? Or Itanium, the 64bit only cpu that barely got market share? Intel sure as hell was pushing manufacturers to not create or sell products based on AMD's chips by literally giving their chips away or threatening to sell them at exorbitant prices if they didn't decide to limit or refuse to even make products with AMD's chips. Their previous CEO even stated that the fines they got were a slap on the wrist vs how much money they made \ were able to keep by keeping AMD locked out of certain parts of the market.

    Or you could just read this lovely article:
    https://www.nytimes.com/2009/11/05/technology/companies/05chip.html

    Again, this is a pile of hot garbage. It's like saying people that eat ice cream have fewer snow skiing accidents. Correlation does not equal causation.

    For the few years there during the P4 era when they were ahead, the AMD athlon was the hottest thing on the market. AMD simply couldn't make enough to satisfy the new demand they were seeing. So they set out to build two brand new fabs to produce enough athlons. But it takes years to build and staff a fab facility. By the time their new capacity came online Intel released the Conroe-era parts and that was that. AMD blew all the money they made on building two new fabs to produce products that no one now wants. And now we have GloFo.

    It wasn't Intel's rebates that caused AMD to choke, it was AMD's poor planning and terrible execution on the athlon's followup that caused AMD to choke.
    Reply
  • TerryLaze
    -Fran- said:
    The difference is size and influence of the rebate.

    As a Corporation, when you offer rebates to AIBs and OEMs which don't have much cash to begin with to buy 95% of their CPU-based products to get a huge discount, that means most of the allocated budget for each line of products will be leaving any other competing components outside as the other supplier can't match the discounted price, even if doing the same. This is the equivalent of a poker match, when you go "all in" and the other party can't match you. Even Poker has rules about that. In this case Intel essentially "cashed out" AMD from even playing the round with OEMs and AIBs. This is what baffles me. This basically will set a very dangerous precedent for Companies with a lot of cash around that can easily sell at a loss until they leave competitors outside; this is also really hard to prove via accounting alone (maybe how Intel is getting away with it). Now, this is important for the CPU market specifically, as X86+Microsoft is like 95% of it in home and office computing. As always, it'll depend on the market.

    Regards.
    Yeah if the deal said "you have to buy 95% from us" then that would be bad, but if the deal said (imaginary numbers) "you have to buy at least 300.000 CPUs from us to get a rebate" and that number happened to be 95% of the money that OEM had as a CPU budget, now that's just a business decision, you would only go below the 300k and lose the rebate to buy some amount of other companies CPUs if it would make you more money.

    Because each OEM had a different % and if it was a tactic from intel to keep amd out then intel would have forced all the OEM to the same percentage of intel CPUs.
    Reply
  • Soaptrail
    jkflipflop98 said:
    Again, this is a pile of hot garbage. It's like saying people that eat ice cream have fewer snow skiing accidents. Correlation does not equal causation.

    For the few years there during the P4 era when they were ahead, the AMD athlon was the hottest thing on the market. AMD simply couldn't make enough to satisfy the new demand they were seeing. So they set out to build two brand new fabs to produce enough athlons. But it takes years to build and staff a fab facility. By the time their new capacity came online Intel released the Conroe-era parts and that was that. AMD blew all the money they made on building two new fabs to produce products that no one now wants. And now we have GloFo.

    It wasn't Intel's rebates that caused AMD to choke, it was AMD's poor planning and terrible execution on the athlon's followup that caused AMD to choke.

    Maybe you are right and AMD could not make enough chips but that was never the narrative provided on hardware sites like this one in that time period. It is hard not to believe what Intel did is anti competitive. But your initial comparison to Coke and Pepsi is not accurate because at one point i could go to McDonalds and get Coke or go to Burger and get a Pepsi. But the equivalent would be the Coke making all bottlers for Coke and Pepsi signing an exclusivity for Coke only and customers would get Coke no matter what restaurant they go to.
    Reply