European Union unveils details of antitrust case vs. Intel

Marketwatch.com ^ | 9/22/09 | Benjamin Pimentel

[your local physicist]

SAN FRANCISCO (MarketWatch) -- The executive arm of the European Union unveiled details Monday of its antitrust case against Intel Corp., including internal emails that the commission said showed the chip giant coercing or cutting deals with manufacturers to shut out rival Advanced Micro Devices Inc.

But Intel Corp. immediately fired back, saying the E.U. Commission "relied heavily on speculation found in emails from lower-level employees that did not participate in the negotiation of the relevant agreements," according to spokesman Chuck Mulloy.

The release of the nonconfidential version of its Intel decision comes about a week after details of the chip giant's appeal before the European Court of Justice were made public. Intel has denied the commission's charges, and argues that the body's case is flawed.

[your local physicist]

My take is that Intel's agreements with customers didn't contractually require customers to not buy chips from AMD, but instead Intel gave customers an economic incentive to not buy from AMD. It's called price competition and volume discounts, and it goes on constantly in all industries and it's not illegal. This fine by the EU is nothing more than attempted theft of $1.45 billion by EU bureaucrats from a highly successful American company. They want Intel's money to pay for more jobs in their bureaucracies (and lavish travel budgets), which the EU needs to reduce chronically high unemployment caused by over-regulation and overtaxation of business.

It's no coincidence that the EU is attempting this theft of $1.45 billion in the first year of the BHO administration. They wouldn't have dared try this kind of brazen theft while Bush was in office, because he would have stood up for Intel and told the EU that he would retaliate against European companies if the EU attempted this massive theft against Intel. We can now expect much more harassment of American companies and more difficulty exporting our products under the current administration. (...and they stay they're "trying to create jobs.")

[mamelukesabre]

I think they already did it with microsoft.

[your local physicist]

Most likely, Bush let them get away with that fine because Microsoft lost an antitrust case in the US and also operates closer to the limits of the law than Intel does. But this looks like a calculated shakedown by the EU against Intel. It’s a huge fine that can pay for a lot of salaries in their bureaucracies, but it’s not big enough to draw a reaction from our current socialist administration. The EU is also holding up approval of Oracle’s acquisition of Sun Microsystems, even though that deal has already been approved by US regulators. There’s no justification for the EU’s slow review of the Oracle/Sun deal, except possibly that the EU is trying to damage Sun through a delay of the acquisition.

[Use as Directed]

AMD vs Intel has been going on for quite a while now.

The EU ruling is not the first anticompetitive judgment against Intel. South Korea and Japan have also found that the incentives offered in conjunction with exclusive purchases of Intel chips result in a monopoly of sorts.

[GeronL]

Shakedown

[GeronL]

I fail to see what they were doing wrong.

If a PC maker decides to make a contract to buy Intel chips exclusively for their machines for a discount, then thats business. Let the other company find their own PC seller.

[Use as Directed]

They used their 80% market share to keep their only other serious competitor out of the market. In 2003-2004, AMD had the superior solution for 1P, 2P and 4P servers. They blew Intel away nearly every benchmark and performance test. But they had far few design wins from PC manufacturers because it was very difficult just coming out of a recession to give up the huge financial incentives from Intel. (And Intel was so scared for losing even a portion of its market share that when you consider the incentives, they sold many chips at cost or even below cost)

[Rock N Jones]

All of the investigations came out AMD’s whining and to some extent they are related, that is that there is communication between the countries. Europe wants greater control and Intel and Microsft two world leaders in technology are targets. It should be noted that Japan did not fine Intel and the Korean fine was not confiscatory as was the European fine.But more than that what is really dangerous for America is the global implications with a US president that is a globalist. Europe is run by bureaucrats and Obama is copying the EU and trying to set up America to do likewise and therefore become subservient to the global community.Is America destined to become a third rate world power? Is it happening before your eyes?

[Rock N Jones]

AMD was gaining market share until Core 2 Duo.After Core 2 Duo their chips could not compete. Their Barcelona chip was suppose to put them in the lead but it was a disaster.They are in deep doo doo now because of the Barcelona failure and they foolishly overpaid for ATI stock. They were about to go belly up so they had to spin their fabs to a company majority owned by the Emirate of Abu Dhabi. Hector Ruiz their former CEO,who some call Hector Ruin, resigned to become chairman of the board for the Abu Dhabi group. By the way he is very well paid! Shucks it should be a noontime soap opera on Channel one!