Week in review: EU slams Intel with record fine

Intel was fined more than 1 billion euros by the European Commission for violating antitrust legislation, following a lengthy investigation prompted by complaints made by chipmaking rival Advanced Micro Devices.

The world's chip giant was fined 1.06 billion euros ($1.45 billion) for engaging in illegal anticompetitive practices to exclude competitors from the market for computer chips called x86 central processing units (CPUs), the Commission said.

Between October 2002 and December 2007, Intel held more than 70 percent of the worldwide x86 CPU market. The Commission found that during the period in question, Intel engaged in two illegal practices. The first was that it gave wholly or partially hidden rebates to computer manufacturers on the condition that they buy all or almost all of their x86 CPUs from Intel.

Intel CEO Paul Otellini responded aggressively to the conclusions attached to the fine and said the company will appeal the ruling. Otellini cited the Commission's determination of the chipmaker "granting conditional rebates, where the conditions just weren't just volume-based but allegations about exclusive dealings or in one case exclusivity on retail shelves."

"Intel strongly disagrees with this decision. We do not have those kinds of conditions in our contracts. Our contracts are straightforward. They're consistent worldwide and they're volume-based: the more you buy, the less you pay," he said.

Answering a question about how will this affect Intel business practices, Otellini said he hasn't seen the 500-page document yet. "The two-and-a-half page summary released to us did not include what the specific remedies they're asking for are," he said.

However, don't expect the EU's antitrust enforcement decision to radically change what you see when it's time to buy your next PC. Antitrust actions can have a dramatic effect when a decision breaks a company into pieces, but the biggest factors in the rivalry between Intel and AMD--and increasingly Nvidia, too--is technology. So while AMD can be pleased with the European Commission's conclusion, it's got bigger worries.

When it comes to taking on Intel, a far bigger factor has been technology--not just processor designs, but also manufacturing skill and capacity--that means chips can be priced competitively while still being profitable.

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[queticomn]

Hrm,

iBM, cell processor.
http://en.wikipedia.org/wiki/Cell_microprocessor
good luck beating that intel.

aMD^ "the future is fusion"

[slickuser]

dude, cell is dead. anyone else other than sony using it?

aMD^ "the future is fusion" - aMD^ "The future is fuzzy"

[Fil0403]

Hrm,

Intel, Quad-Core Itanium 2 Processor (code-named Tukwila).
http://en.wikipedia.org/wiki/Itanium_2#Itanium_2_processors:_2002.E2.80.93present
Good luck beating that + around 75% world market share IBM.

mE^ "the future is Intel"

[Fil0403]

Hem,

Intel, Quad-Core Itanium 2 processor (code-named Tukwila).
http://en.wikipedia.org/wiki/Itanium_2#Itanium_2_processors:_2002.E2.80.93present
Good luck beating that + around 75% world market share IBM.

wORLD^ "the future is Intel"

[queticomn]

iBM: PowerXCell 8i bandwidth: greater than 300 GB/s
Fujitsu: Venus SPARC64 VIIIfx which is capable of 128 GFLOPs *announced today*
Intel: Intel Core i7 6.9 GB/s.

Heh.
Cell has it...

[Fil0403]

You're comparing apples to oranges without even mentioning whether that is interprocessor or memory bandwidth, ignorant. Intel's Quad-Core Itanium 2 processor (code-named Tukwila) has 96 GB/s peak interprocessor bandwidth. Plus:

Intel: +- 75 % worldwide CPU market share
IBM: 25- %
Fujitsu: +- 0 %

Heh.
Cell has it alright.

[queticomn]

@Fil0403in terms of speed duh..

[cuentitarrr]

The question now is where all that money from the fine will go? Supposedly, fines are to protect the customer, but such a big amount of money will really go to the consumers that have been damaged by Intel's practices?

What really interests me is where all the money from the fine will go.

[Fil0403]

It will go to finance next Microsoft's record fine for engaging in anti-competitive actions by bundling Windows with Paint, thus seriously hurting Adobe and its Photoshop business.

[santuccie]

I'm with Fil0403 on this one. This, and also Opera suing MS for bundling IE. Never mind that MS Updates and some applications rely on IE, or that a lot of Web pages won't even display in Opera.

Of course AMD had to take Intel overseas to sue them, rather that here at home, where courts go by the book. In Europe, frightening the pigeons is a formal charge, LOL.

[mupptasstic]

The question now is where all that money from the fine will go? Supposedly, fines are to protect the customer, but such a big amount of money will really go to the consumers that have been damaged by Intel's practices?

What really interests me is where all the money from the fine will go."


It's to fund our new gay married peoples adoption scheme, where gay couples can adopt kids.....oh and harvesting stem cells from dead babies...yeah that sounds good....

[Fil0403]

As long as money is being take from Microsoft or Intel everybody's happy. There's a reason why they don't touch Apple and their Windows-like iPod/iTunes business, for example. They don't have 10 % of the money and it would be unpopular.

P.S. I am a happy iPod/iTunes user.

[Fil0403]

I am also a happ Windows Vista and future Windows 7 user, btw.

[JJDickson]

Intel would be quite entitled to withdraw its products from the EU market, and would be wise to do so. the EU is a corrupt, thieving immoral institution whose accounts have not been approved, nor signed off for over 15 years! Intel - don't pay the fine! JD.

[Fil0403]

Sometimes I also think the best thing Microsoft and Intel could do is to withdraw their products from the EU market, given sometimes it seems EU's main goal is basically to make technology consumer products worse (Windows N anyone?) and finance their expensive lifes (how come iPod/iTunes doesn't bother them? Could it be because Apple doesn't have 10 % of the money Microsoft and Intel do?), as if that would be customers' general wish. Then I start thinking how it would be here in EU without Microsoft and Intel and I thank God they don't do that.

P.S. I am a happy Windows + iTunes + iPod user.

[Fil0403]

If, indeed, Intel engaged in anti-competitive practices, then IMO the EU should 1) make sure such things don't happen again (without hampering technology evolution) and 2) make sure that money goes to the customers they are supposedly protecting. I don't why, but I doubt any customer will ever see a cent of that money.

Either way, and regardless of whether Intel ever engaged in such practices or not, IMO they deserve to be in the position they are today (i.e. #1 spot) because they are the best in what they do and they will probably continue to be. This is just like Microsoft's case: they may have engaged in anti-competitive measures, but IMO no one gets to be #1 with crappy products and/or services. No one will want them if they suck. Their rivals (i.e. AMD and Apple) should be focused on delivering superior products that make people switch (and they certainly will if they are, indeed superior, it is the natural way of things) and stop whining and trying to find excuses why they can't beat the leaders (i.e. Intel and Microsoft). Fining big companies doesn't do nearly as much for us as customers as better products do.