Intel contests EU on $1.45 billion fine

This was originally posted at ZDNet's Between the Lines.

Intel said Europe's top antitrust regulator failed "to meet the required standard of proof" when it fined the chipmaker $1.45 billion in May for anticompetitive behavior against Advanced Micro Devices. (The news comes as Apple named Intel's top lawyer Bruce Sewell as its general counsel.)

Intel noted that it would appeal, and the company recently laid out its case against the European Commission, the administrative wing of the European Union. In a nutshell, Intel argues that the EC:

• Failed to address evidence that AMD was increasing market share during the period in question;
• Failed to establish a causal link between Intel's discounts and customer decisions not to use AMD;
• Failed to analyze how those discounts impacted consumers at all;
• And failed to stick to legal procedures as it decided to fine Intel.

The stakes are high, as AMD cited the EC fine as a big win. A key passage from the appeal:

The Commission fails to prove that Intel's rebate arrangements were conditional upon its customers purchasing all or almost all of their x86 CPU requirements from Intel. In addition, the Commission uses an 'as efficient competitor' ('AEC') test to determine whether Intel's rebates were capable of restricting competition but it commits numerous errors in the analysis and assessment of the evidence relating to the application of that test. The Commission also fails to address other categories of evidence relevant to the effects of Intel's discounts.

The company is asking that the EC decision be nixed completely, "annul or reduce substantially the level of the fine imposed" and pay Intel's legal costs.

[goodspeed8701]

The EU is milking.

[cp256]

The EU seem to be a bunch of greedy anti-business left wing nutjobs.

[thelemurking]

If the EU keeps this up, the entire population can sit back and retire as they steal money from the US.

Granted, Intel did some pretty shady things and deserves to be punished... but a large sum of that money should go to AMD, not to the EU.

[tech_crazy]

If not completely to AMD atleast partially. All the same the theory is that EU customers were harmed. So, the fine paid to the EU would be indirectly passed on to the EU customers by way of reduced taxes.

I love it when companies get fined and the money goes to the EU/SEC/states/Attorney Generals ... anyone but the actual victims. Amazing!

[odubtaig]

I didn't see any of you ameritards on http://news.cnet.com/8301-30684_3-10351129-265.html

Oh wait, it's only 'evil', 'stealing' or 'milking' when the EU does it. You dossbags are the reason the rest of the world thinks the USA is populated by retards.

[Phx01]

I am living in the EU and I did not feel harmed by Intel in any way. However, considering the generally empty registers in the EU, I get more the impression that it wants to fill them again by sentencing big companies for ridiculous reasons. While I am using an Apple computer in the meantime, I still find it ridiculous that Microsoft is blamed for having Internet Explorer shipped with Windows 98 or Windows Media Player with Windows XP/Vista. Apple also has its media player (iTunes) and web browser (Safari) included.

@ tech_crazy
Knowing the countries in the EU or the EU itself there would not be any tax breaks for the customers. Instead, I see the tax still going up. No matter what insult they try on any bigger 'outside' corporation.

Just see the invention of the Internet taxes. No other part of the world has this and one needs to pay just because they are an EU citizen. Even if the company you purchase an item from is not even remotely tied to the EU. And vice versa? The people buying from the States, can buy the European stuff without added taxes.

Example: Skype. If you purchase SkypeOut credit as a EU citizen, you pay the local tax of the country you reside in additionally to the credit you need to pay. As a non-EU citizen, you just pay the credits. No taxes, nothing extra

So, I agree to cp256 that they are greedy and not only against businesses, but also against their own citizens.

[odubtaig]

Yes, thankyou Phx for saying that people should be allowed to dodge sales taxes just because of how they purchase an item.

Whiney, whiney, whiney. Maybe you'd prefer it in America with your "right to work" laws and no healthcare.

[Phx01]

@ odubtaig

I did not mean to dodge sales tax, but there should be some fairness. If there is a tax on European products, everyone should pay tax on getting it. Not just some.

Also, if you run a business, you most-likely pay sales tax on everything you sell and most-probably increase the price to incorporate those taxes in your end-user total price. Now, what I wonder about the EU is, why do I as a EU citizen need to pay taxes twice (The one incorporated in the product and then the extra EU one)? If I go to a shop physically, I just pay taxes once. That is the thing I was talking about. It was never about dodging any taxes.

[odubtaig]

You need to read up on the tax rules properly. VAT is the only sales tax in europe and is either incorporated into the price shown at the point of sale _or_ added on at the time of sale. It's never both. The point of VAT is that it pays for the infrastructure that the government provides which allows the transaction to take place (in this case including regulation of ISPs to ensure that they meet a minimum level of quality of service).

Other countries have their own sales taxes (in the USA it's applied on a state by state basis) and this 'internet tax' laws just apply VAT to non-tangible items. It's exactly the same rules as apply to physical goods.

[pentest]

At least there is a government organization somewhere that puts people ahead of corporate interests.

[voodoojmh]

Really it appears though that nobody was harmed in this situation, other than the fact that the EU is looking to make a quick buck out of Intel. Thus, the EU is only looking out for it's own interest, no individual was harmed. Government interests are no different than corporate interests.

[Vegaman_Dan]

You may be right about that. The EU administration is the one bringing this case up. And here's an interesting tidbit- the money from the fines doesn't go to the EU member countries- it goes to the EU admin itself. There's a lot of expense in focusing your attention on suing companies and preventing free trade with other countries. They need the money to fund their own efforts. Even now, the EU has been raising member dues to the countries they represent.

You'd be surprised at how amazingly coincidental the costs of running the EU exactly matches whatever they take in to the point there is no money left over to give to the member countries. Funny how that is.

[Renegade Knight]

Our own government could take some lessons. Ironic that europeans are starting to be healtheir, wealtheir, and more free than folks in the USA.

[odubtaig]

Vegaman, you're full of ****.

EU member contributions will be reduced by $1.45Billion. How much was the fine again? Oh yeah.

Funny how a simple administrative process that means they don't ask for money then hand it back but instead don't ask for it at all can be twisted by any sychophant with an agenda if they leave out tiny but fundamentally important details.

You're a poor example of the species.

[Jim1900]

I am sure that Intel is making the best legal arguments that it can under the EU law, but it misses the entire point. That is, the discounts help the customer. If they hurt AMD, that is tough. But of course the EU gets that point backwards in their law, so there isn't anything Intel can do except argue it the best they can.

[Renegade Knight]

If you believe in capitalism, and you believe that competition is good. You then have to ensure fair busienss practices. If Intel hands AMD's butt to them on a platter because AMD is a bunch of morons and Intel did everthing right, that's one thing. If they do it becasue they are so large they can afford to sell at a loss for 10 years and AMD can only do it for 2. The customer will lose in the end when Intel is a monopoly because of the unfair business practice. Apparently the EU believes in capitalism as opposed to a corporate state like the USA.

[YankeePoodle]

Two american companies fight.. and EU gets 1.6Billion, I love this... way to go to fund a welfare state.. I have advice for Obama to fund healthcare, fine every frigging european company in US.

[voodoojmh]

I like that idea...

[mssoot]

BMW & VW are fined 2 billion dollars for anti-competitive financing techniques damaging Chrysler Corporation beyond repair by US fair trade commission. That would send the necessary message across the atlantic

[odubtaig]

Genius idea! Take two companies, the combined marketshare of which are less than 50% in the USA including subsidiaries, and prosecute them as monopolies. That'll work.

Here's a better idea, find a European company with a significant marketshare in it's field in the USA and see if the DoJ has taken any action against them instead of chasing obvious consumer brand-names like a prat.

[WriteRight]

@Phx01
I'm not so sure what you mean with "internet tax". I live in Germany and the only tax I pay here for the internet is the normal VAT included in the monthly bill I get from my ISP. There might be one or two EU-countries though that do charge a form of internet tax like you described (hight tax Sweden maybe) but it most certainly is not a wide spread form of taxation (yet) in the EU. I suggest you come and live in good old Deutschland if you don't like internet tax.