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EU expected to fine Intel for anti-competitiveness

EU expected to fine Intel for anti-competitiveness

The EU is expected to announce this week that it will fine Intel for anti-competitive business practices that stretch back eight years.

The European Union antitrust regulators are expected to rule this week that Intel illegally paid computer manufacturers to postpone the launch of AMD-based products.

It's expected that the European Commission will reveal its decision to fine Intel on Wednesday and order the company to change its business practices, which the EU believes have been illegal for a period stretching back eight years.

There has been no information on how big the fine might be, but the largest fine levied by the EU was against Microsoft in 2004, where the Commission demanded €497 million (£447 million) for the company's anti-competitive practices.

According to Reuters, the EC is expected to find Intel guilty of anti-competitive practices on two counts. The first violation will say that Intel gave rebates to computer manufacturers to obtain exclusivity or to restrict the use of competing chips from AMD and that it provided other incentives to retailers who chose to sell only Intel-based machines.

The second finding will state that Intel paid PC manufacturers to delay or scrap the launch of AMD-based products and that these payments have restricted competition in the market.

These violations allowed Intel to set the percentages of the market that it wanted to control. For example, NEC was told that 20 percent of its desktop and notebook machines could be AMD-based, while all Lenovo notebooks (and relevant Dell products) had to use Intel chips. 95 percent of HP's business desktop machines had to be Intel-based.

The Commission will order Intel to end those rebates and incentive programmes which it deems illegal by a specific date. Both Intel and the European Commission declined to comment on the rumours, and Intel has repeatedly said that it has done nothing wrong. We'll have to wait until Wednesday to find out if Intel will be fined for anti-competitive business practices.

Do you think it's the right decision and, if so, how much do you think Intel will be fined? Let us know your thoughts in the forums.

17 Comments

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Dreaming 11th May 2009, 12:07 Quote
Holy crap I had no idea Intel did that kind of stuff. I'm guessing €250 million, just a random figure out the air :p
PT88 11th May 2009, 12:19 Quote
max they can fine them is 10% or their turn-over for a year, which would be billions i think....
Tyrmot 11th May 2009, 12:24 Quote
This is pretty clearly highly anticompetitive and a large fine seems justified to me. I wonder how much of the fine will go to AMD thought? Only seems fair after all...
yakyb 11th May 2009, 12:42 Quote
problem is the only result this will have is to us is to hike chip prices up 10%.

well that and AMD will gain some market share problem is though is that AMD are not beating the crap out of intel now as they where 3years ago and the uptake on amd products will not be nearly as high as it could have been back then

maybe 10% more expensive chips is a small price to pay to see competition in the market in the next 3-5 years
lp1988 11th May 2009, 13:23 Quote
Quote:
Originally Posted by Tyrmot
This is pretty clearly highly anticompetitive and a large fine seems justified to me. I wonder how much of the fine will go to AMD thought? Only seems fair after all...

In the end... proberly nothing, It's like when you get a parking ticket, i all goes to the state.
sear 11th May 2009, 13:49 Quote
Everyone knows it's the OEM stuff that makes all the money, and by giving out cash incentives and similar for manufacturers to stock X amount of Intel over AMD, Intel effectively guaranteed its sales. I'm not sure if it's "anti-competitive" (more like as competitive as you can be) but it definitely stinks.
Tim S 11th May 2009, 14:17 Quote
the reason it's classed as anti-competitive is because the alleged deals would have quickly evaporated had the retailers/manufacturers not got involved in the agreements - they'd end up paying (much) more for their Intel processors and AMD doesn't have the manufacturing capacity to fulfil the entire market like Intel does.
Xtrafresh 11th May 2009, 15:13 Quote
The entirety of the fine will go to the EU, as it is a fine, indeed a (rather big) parking ticket. The max is about 4,7B if i remember correctly from another source on the web where i saw this news discussed.

AMD will be sure to file a civil suit shortly after the EU Commission passes it's verdict though, and the fine from that suit will go 100% to AMD (and their lawyers). This one is far from over!
n3mo 11th May 2009, 17:06 Quote
Always good to see anti-competitive practices punished, no matter which company does it. AMD suit will surely follow shortly, but it will take another 10 years, sadly the law works ridiculously slowly. I wonder when the EU vs. Microsoft suit will end, it's going for like what, 10 years now?
JyX 11th May 2009, 17:18 Quote
Intel is also under investigation in Korea and Japan for the same reasons... in the US the FTC and the state of New York have their own cases as well.

If Intel will get fined in EU it might have repercussions in the rest of the world too. Not mentioning that the fine in EU should be less than 10% of the $38 billion revenue... if the rest follow, it won be just a financial crisis year... but a plain s***** year for them.
barack 11th May 2009, 17:26 Quote
No i dont think intel should be fined because its rule of the market, if you want to win in marketing make sure you are far away from your competitors and that is what intel has done.
dslickness 11th May 2009, 17:48 Quote
After hearing this I'm going to rethink about what my next chip will be. I've been an AMD fanboy since I've built my first comp, I really wanted to get the I7 but after hearing this I can't justify it. Intel already has most of the market, including holding Apple by its balls. Will that ever be enough??

I'm probably going to pass the I7 and once again support the underdog.

GO AMD! Don't lose to the cheap shot giant!
knutjb 11th May 2009, 18:17 Quote
Quote:
Originally Posted by barack
No i dont think intel should be fined because its rule of the market, if you want to win in marketing make sure you are far away from your competitors and that is what intel has done.

You don't understand the market, Intel is using mob like strong arm tactics that make products more expensive for all. This isn't winning market share this is a willful criminal act to push competitors out of the market. Acts like this are why we have laws to prevent it and Intel probably made a business decision that the fines would be offset from the profits gained and the financial stifling of it's competitors. Thus leaving it in the technological lead. Those who pressed this policy at Intel should go to jail, it's the only tool to left to encourage ethical business practices since fines are just a hindrance to a particular quarter's bottom line.
Star*Dagger 11th May 2009, 19:22 Quote
I REALLY love it when the EU gives intel and microsoft a much needed spanking, kudos EU!
Cupboard 11th May 2009, 20:15 Quote
I think that if they do fine Intel, they should give most of the money to AMD, as it is AMD they have hurt most.
JyX 12th May 2009, 04:48 Quote
Quote:
Originally Posted by barack
No i dont think intel should be fined because its rule of the market, if you want to win in marketing make sure you are far away from your competitors and that is what intel has done.

That practice isn't allowed for well established businesses... only for smaller ones!
unrealhippie 13th May 2009, 11:00 Quote
And the scores are in! Fined a massive:

1.06bn euros / $1.45bn / £948m

Record fine, over 2x what microsoft had to pay! Eeek!
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