EU dives into Intel antitrust specifics
European antitrust regulators on Monday published internal e-mails that detail alleged antitrust behavior by Intel.
The European Commission Monday published a "non-confidential version" of its May 13 decision against Intel, which imposed a fine of $1.45 billion against the chip giant. That decision found that Intel broke EC Treaty antitrust rules (Article 82) by engaging in illegal practices to exclude competitors from the market for "x86" central processing units (CPUs).
The EC action was based on complaints from Intel's chief rival, Advanced Micro Devices.
Intel appealed the decision in July to a European court, saying that "evidence was ignored or misinterpreted."
Today, the EC fired back. Some of Monday's particulars from the EC press release include:
Intel rebates to Lenovo during year 2007 "were conditioned on Lenovo purchasing its CPU needs for its notebook segment exclusively from Intel. For example, in a December 2006 e-mail, a Lenovo executive stated: 'Late last week Lenovo cut a lucrative deal with Intel. As a result of this, we will not be introducing AMD based products in 2007 for our Notebook products'."
Intel rebates to Dell from December 2002 to December 2005 were conditioned on Dell purchasing CPUs exclusively from Intel. For example, in an internal Dell presentation of February 2003, Dell noted that should Dell switch any part of its CPU supplies from Intel to its competitor AMD, Intel retaliation "could be severe and prolonged with impact to all LOBs [Lines of Business]."
Intel rebates to HP from November 2002 to May 2005 were conditioned on HP purchasing no less than 95 percent of its CPU needs for business desktops from Intel (the remaining 5 percent that HP could purchase from AMD was then subject to further restrictive conditions set out below). In a submission to the Commission, HP stated that "Intel granted the credits subject to the following unwritten requirements: a) that HP should purchase at least 95% of its business desktop system from Intel ..." An HP executive wrote: 'PLEASE DO NOT... communicate to the regions, your team members or AMD that we are constrained to 5% AMD by pursuing the Intel agreement.'"
The EC also cited "Naked Restrictions" such as: "Intel payments to Acer were conditioned on Acer postponing the launch of an AMD-based notebook from September 2003 to January 2004. For example, in a September 2003 email, an Intel executive reported: "good news just came from [Acer Senior Executive] that Acer decides to drop AMD K8 [notebook product] throughout 2003 around the world...They keep pushing back until today, after the call with [Intel executive] this morning, [Acer Senior Executive] just confirmed that they decide to drop AMD K8 throughout 2003 around the world. [Acer Senior Executive] has got this direction from [Acer Senior Executive] as well and will follow through in EMEA [Europe Middle East and Africa region]".
AMD was quick to chime in with a comment Monday. "This is the first time that Intel has had to confront now publicly available facts of its illegal behavior and it won't be the last. The U.S. FTC and New York Attorney General's continuing investigations and AMD's civil case against Intel will provide other clear demonstrations of Intel breaking the law, and we remain confident that we will win our U.S. civil case against Intel, which goes to trial in March," AMD said.
Intel also issued a response Monday. "There is nothing new here. This Decision reflects the underlying bias we have come to expect from the case team that ran this investigation," Intel said. "The Commission relied heavily on speculation found in e-mails from lower level employees that did not participate in the negotiation of the relevant agreements," Intel said. "At the same time, they ignored or minimized hard evidence of what actually happened, including highly authoritative documents, written declarations and testimony given under oath by senior individuals who negotiated the transactions at issue."
Intel continued: "Also, the Commission consistently construed ambiguous documents in a manner adverse to Intel, while overlooking or dismissing authoritative documents as 'insufficiently clear' when they contradicted the Commission's case. This pattern occurred across the board with respect to documents and statements submitted not only by Intel but also by third parties. The result was that the Commission dismissed or ignored extensive exculpatory evidence."
Brooke Crothers has served as an editor at large at CNET News, an editor at Dow Jones' Asian Wall Street Journal Weekly, and a senior editor at InfoWorld. His CNET blog covers chip technology and computer systems, and how they define the computing experience. He also contributes to The New York Times' Bits and Technology sections. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. Follow Brooke on Twitter @mbrookec. 
I can't see where Intel las any defense on this.
It details exactly what AMD alleges.
"The commission consistently ignored our carefully prepared "official" coverup documents, while relying heavily upon the actual verbal agreements that we made under the table and behind closed doors. These secret agreements were made by people who had nothing to do with the official coverup agreements, and thus the secret agreements should be ignored by the court. Also, we consider our senior execs to be lower level employees. Er... when they get caught."
-- Damon_Hastings
The EU is funding their economic recovery by "fining" big companies like Intel and MS. I wonder where their "suit" vs Apple is for only including Safari in OSX. It's the same deal as when you buy a Windows computer - you get IE, right?
Yeah. F the EU.
Yes, AMD's chips are now slower than Intel's. And this is very much a direct result of "what happened years and years ago" (i.e. over the past 7 years up to and including this year.)
Back in 2002, AMD chips were faster, cheaper, and used less energy. AMD beat Intel to the 64-bit market by a wide margin, and they were poised to run away with that entire market (i.e. the future of computing.) That is why Intel acted. And those actions were extraordinarily successful, too! By threatening to shut down any customer who bought from AMD, Intel eviscerated AMD's sales. Without an R&D budget, AMD naturally fell behind. So, yes, AMD chips are now slower.
The hidden cost to the industry here is that, by holding back the entire market until they had a chance to catch up, Intel has actually delayed human progress in this field. Computer chips would be slightly faster today if they had not done this. This is the inevitable result of most anticompetitive practices, and it's partly why they're illegal.
-- Damon_Hastings
Have a wonderful day :)
I don't know why all you dumbshits don't move to Russia given its current political structure is the one most in line with your boneheaded "might makes right" ideology.
AMD is no longer a threat, and is "on financial high seas" now as a direct result of what Intel did in 2002. They crushed a far superior technology using their market dominance. cloudmatt's link shows Intel's customers complaining about being locked into inferior technology. Of course, Intel's technology is no longer inferior, as they successfully eliminated much of AMD's research budget. Intel did not "catch up" to AMD, so much as they held back the entire microchip industry to give them time to get their own act together (which they now have.)
Intel's tactics, while illegal, were also extraordinarily successfuly. The EU penalty that Intel now faces is trivial compared to what might have happened to Intel if they had competed fairly against AMD. This $1.45 billion penalty is just a "cost of doing business" for Intel -- akin to an additional tax. It will do nothing -- NOTHING -- to change their behavior if they ever find themselves in a similar situation in the future. For that, you'd need a much larger penalty, and more than just money.
-- Damon_Hastings
Cut to today: the top of the line desktop processor from intel is $1000 and the mid range i7's are ~$500. AMD's profit margins are slashed to ribbons to retain its small piece of the pie.
ATI division is doing nicely though. Luckily, for the intelligent enthusiasts out there with a limited budget, people have seen that CPU brute strength isnt needed for gaming, and a cheap but still effective Phenom II can allow people to afford high end HD 4800 series cards, and sometimes even a Crossfire setup. Let's not even talk about how criminally powerful the HD 5800 series specs are looking :)
All in all, I'm happy that even though AMD may be fighting for dear life, they still have their chin up.
Paybacks coming.
GLOBALFOUNDARIES - FAB 2 - Coming Soon 2012
Don't have that problem at all with nVidia cards. My next, and all future card, purchases will all be nVidia - and I will be sure to recommend to all family and friends to do the same.
If it weren't for thet constant driver crashing - ATIs nemesis has ALWAYS been ****** drivers - ATI cards would be great.
Intel needs to be spanked big time.
Does anyone remember why there are few Intel emails from "senior execs" about all of this? Remember that Intel "accidentally" lost millions of emails during the discovery process in the AMD vs. Intel lawsuit?
Wow, Intel is much more corrupt than I imagined. Big time spanking!! Yes yes yes!
I mean, I'm still scratching my head trying to figure out why the DoJ essentially walked away from their antitrust case against Microsoft, immediately after winning it. If they were in bed with Microsoft, then why launch the case in the first place? But if they weren't in bed, then why throw the case out after winning? Makes no sense. I don't get those guys.
-- Damon_Hastings
Sure, Intel offered some sweet deals to manufacturers, but they could have turned those deals down and just purchased AMD. It was the desire to get the lowest possible price -- greed -- that drove everyone's interest in the Intel deals.
And of all of the messages posted, which of those are EU-based companies? None that I can see. So, why is it that the EU imposes this insane penalty?
Perhaps more importantly, if a law was indeed broken, why isn't the leadership punished, rather than the company. Punishing Intel today does not really hurt the CEO and other senior leadership who have already made fortunes. What it does do, though, is hurt the investors who own stock today. Such fines seem to make little sense -- they do not punish those who ought to be punished.
2) While Intel may be an American company they participate in the global market. They have been pulling this crap for quite a while now. The EU was just the first to catch them with their hands in the European cookie jar. there are lots more suits and fines to come. 1.45 billion might seem huge now but it's chump change compared to what may be to come.
1) The EU does not claim Intel is solely to blame for AMD's troubles. Their claim (and verdict) is simply that Intel broke the law. Most first-world countries have laws against a monopoly using its market dominance to unfairly suppress competition, e.g. through extortion-like pricing tactics. The discounts Intel offered were so steep that their customers were completely dependent on them. Any customer refusing the discount would be immediately trounced by customers who didn't. But that's not what made the discounts illegal; what made them illegal was that Intel required its customers to STOP BUYING FROM AMD, even if AMD chips were still cheaper than Intel (and they were)! This was not merely a volume discount; it was an exclusivity discount -- and it's highly illegal for a monopoly to do that. It was a "stop buying from our competitor or we'll shut down your business overnight" discount. Though not legally considered extortion, it's basically the same thing. And Intel knew this was illegal, which is why they tried to cover it up.
2) The EU is involved because, in their view, EU customers were harmed (deprived of choice). And innovation was stifled. Intel's EU subsidiary sells chips to Dell and HP's EU subsidiaries, which sell to EU customers. The EU has jurisdiction over these subsidiaries, and it is technically the subsidiaries which are fined. Intel can pay the fine, or else leave the EU market. (And leave all other markets which follow the EU's example in coming months.)
I wouldn't call a 1.45 billion dollar penalty "insane". More like a slap on the wrist. Intel will hardly even take notice, unless lots of other jurisdictions (particularly the US) follow suit. The penalties have been gradually increasing in the past decade or two, as governments are getting tired of companies simply ignoring slaps on the wrist.
The Intel leadership is not being punished, because that's outside this particular commission's jurisdiction. Moreover, it is extremely difficult to personally punish corporate leaders; they're way too good at playing that game. The REAL decision makers almost always have deniability. However, the leadership of most companies is keenly interested in keeping shareholders happy. This penalty will make shareholders unhappy. And other companies will hopefully take note. And if we're really, really lucky, then shareholders the world over just might start taking corporate ethics into account when choosing a company, which could in turn cause companies to become more ethical. Maybe.
-- Damon_Hastings
Did you even read this article? Please, go back and read THE ENTIRE ARTICLE. Not just bits, ALL OF IT.
1. Intel threatened companies, they didn't "offer sweet deals". Is someone paying you to write this bollocks? Seriously, only someone with brain damage could read the whole of the above article and sill write such utter crap.
2. Does Intel only do business in the USA? When Intel strongarms vendors does this only affect US consumers? No. You're not very bright are you.
"which of those are EU-based companies?"
Which of these companies do business in the EU? Both of them. Does it matter where they're based? No.
"why isn't the leadership punished, rather than the company?" Please, please, please look up who is and is not liable for the actions of a publically traded company in law. This applies even more in the USA than it does in Europe.
Da Worfster
- by gggg sssss September 22, 2009 4:56 PM PDT
- EU just sore that siemens, Nokia etc have not figured out how to make a microporcessor after 30 years
- Like this Reply to this comment
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- by nECr01967 October 14, 2009 8:22 PM PDT
- Really???
- Like this
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(28 Comments)Ignoring the many ways this comment is just plain stupid, I'll just point out the biggest reason no one else makes an x86 CPU. Licensing. To produce an x86 compatible CPU you need a license. From Intel. And now that Winchip and Cyrix were bought out by VIA, Intel isn't letting anyone else onto the playground.