Forgot your password?
typodupeerror
Intel Government The Almighty Buck News

Intel Faces $1.3B Fine In Europe 280

Posted by kdawson
from the not-to-be-outdone-by-microsoft dept.
Hugh Pickens writes "European antitrust regulators, who have been aggressively pursuing what they see as anticompetitive practices among technology companies, could impose their largest fine ever in a market-dominance case against Intel. The commission began investigating Intel in 2000 after Advanced Micro Devices, its arch-rival, filed a complaint. In two sets of charges, in 2007 and 2008, the commission accused Intel of abusing its dominant position in chips by giving large rebates to computer makers, by paying computer makers to delay or cancel product lines, and by offering chips for server computers at prices below actual cost. Some legal experts speculate that Intel's fine could reach about a billion euros, or $1.3B. 'I'd be surprised if the fine isn't as high or higher than in the Microsoft case,' said an antitrust and competition lawyer in London. In 2004 Microsoft paid a fine of €497M, or $663M at current exchange rates, after being accused of abusing its dominance; the EU imposed another $1.3B fine in Feb. 2008."
This discussion has been archived. No new comments can be posted.

Intel Faces $1.3B Fine In Europe

Comments Filter:
  • Ouch! (Score:5, Insightful)

    by Spatial (1235392) on Thursday April 30, 2009 @12:10PM (#27774089)
    I like Intel's hardware, it's really impressive. But that kind of crap can't go unpunished and it's nice to see a penalty with some teeth, even if it's only potential teeth right now.
    • There is no fine, this is just a media frenzy obviously to whip up the news a bit.

      The fine could be 20 billion, or there could not be a fine at all. Just sit it out and wait.

      • That's why he said "even if it's only potential teeth right now".

        And if it becomes a real fine, you can be sure that the EU will enforce payment. Because if intel does not pay, the will be some hefty fine of X million € per day.

  • by AnalPerfume (1356177) on Thursday April 30, 2009 @12:11PM (#27774107)
    As much as I like to see anti-competitive practices punished, I'd rather the US regulators would do their job on occasion, not just the EU. Many of the companies who have been accused of anti-competitive practices are US companies, so the PR hit of being fined by their own side would perhaps hit home more than outsiders. That aside, is there any point to these huge fines? Guess who it's going to be passed onto? Intel gets fined and I suspect that by some remarkable coincidence the prices of their chips mysteriously increase.
    • by JustinOpinion (1246824) on Thursday April 30, 2009 @12:27PM (#27774425)

      Guess who it's going to be passed onto? Intel gets fined and I suspect that by some remarkable coincidence the prices of their chips mysteriously increase.

      Yeah that's the point.

      Intel have been able to keep their market share artificially high by abusing their dominance. This has made it difficult for other companies to compete. If Intel is forced to raise prices to cover the fines, then this gives other companies the chance to gain market share by competing on price.

      In other words, the fine restores some amount of competition, as intended, and serves as a deterrent against continuing to abuse dominance, as intended.

      • by sjames (1099)

        And if there is no fine, the other companies die off then we REALLY get hit by raised prices.

      • Re: (Score:3, Interesting)

        Yes, misapplication of antitrust at its worst. This is just protectionism. Know the difference? In this case, AMD benefits, customers pay higher prices. In fact, say Intel raises its prices 0.5%. AMD can then raise their prices 0.4% and come out ahead. Who loses: Customer.

        Please, spare me the "but in the future there's more competition, it's better in the long run" argument. I'm tired of reading stupid things today.

    • Re: (Score:3, Insightful)

      by Gat0r30y (957941)
      Fines don't seem to be particularly good - breaking up market collusion and creating a more competitive marketplace would seem to be the goal. I'm no economist but it would seem to me that breaking up giants like Intel into many smaller companies could be more effective - but the crux of this seems to be that the R&D at this point is all toward smaller lithography processes. With only two major players in this market there is still significant incentive to invest in R&D but with more players it mi
      • Re: (Score:3, Insightful)

        by Explodicle (818405)
        it would seem to me that breaking up giants like Intel into many smaller companies could be more effective

        The EU doesn't have the authority to break up a US-based company. Fines are one of their few options.
        • Sadly, the biggest deterrent of them all -- locking the culprit out of doing business in the European market -- would only tip the scales so far towards AMD that it's not even funny. Which is why even two competitors is not nearly enough for a healthy market.

        • by Gat0r30y (957941)
          A valid point. If only regulators in the US had balls.
      • by MrMr (219533)
        breaking up market collusion
        That of course is not something the EU could do with an US based company.
    • by samwise668 (1384025) on Thursday April 30, 2009 @12:49PM (#27774795)
      As an european i'd say let the europeans benefit from the fines if the US is not interested in punishing those who broke the law by abusing their monopoly.
    • Remember that little crisis we are in. No not the war on terror. No not swine-flu. Or the bird-flu. No not the high oil-price that one is over. No it ain't the low oil price either. The credit CRISIS! Geez pay attention will you!

      Anyway, the cause of it all is big american companies who got so big they also fell under EU regulation convincing the EU that the US regulation was though enough. The EU swallowed that ONCE and look what happened. Dead, misery, war, starvation!... well okay, a suicide, some fat ca

      • 3/5 (Score:3, Funny)

        I give your post a 3/5. You didn't use the word "corporations" in a pejorative sentence. You didn't say "fat cats". You failed to mention Evil Monsanto.

    • Re: (Score:3, Insightful)

      by kaffiene (38781)

      ...and then AMD can undercut them, sell lots of product and everyone wins except Intel. What's the problem with that?

      What you suggest would only be the inexcapable outcome if Intel were already a monopoly, which - thanks to legal actions like this from the EU - they are not yet.

  • Playing Fair (Score:4, Insightful)

    by CopaceticOpus (965603) on Thursday April 30, 2009 @12:17PM (#27774203)

    It's a good thing that there is someone keeping these giant companies accountable, since the US system isn't going to enforce anything. Remember the DOJ's anti trust case against Microsoft? Microsoft technically lost that one, but it didn't seem to cost them anything.

    We need to enforce a fair playing ground where companies can legitimately compete. AMD has been the biggest impetus keeping Intel's chips moving forward and keeping their prices lower.

    • Re: (Score:3, Insightful)

      by AnalPerfume (1356177)
      Perhaps the EU should introduce a second tier of punishment for anti-competitive practices. Those who are found guilty have only one chance to change their ways with independent observers allowed to go anywhere in the company, examine any documentation etc. Failure to comply means the second tier kicks in and the company is banned from doing business at all anywhere within the EU for a length of time. You could have the ban in place until observers are satisfied that things have changed, and those responsib
    • "Remember the DOJ's anti trust case against Microsoft?"

      YEA, what Intel should do is get the themselves appointed to a compliance board set up by the EU to monitor their future behavior.
  • The term 'anti-competitive' is what most companies desire to some degree or another; to reduce the effectiveness of or marginalize the competition. I'm against monopolistic behavior. And although MSFT and Intel may have raised the ire of the EU on this front, I'm waiting for the day the EU fines a business so much they simply stop doing business in the EU.

    Someday, the irony might be that the EU's actions result in reduced competition when a company simply packs up their products and leaves.
    • That may happen, and in all likelihood if if does, it'll be a HUGE US corporation, one who has been dominating the market so much that non-US companies struggle to enter the market. So if the big boys don't like having to compete within the rules and decide to leave, it'd open up the market for others to enter. This is not a bad thing. The assumption that the market will be missing something is bogus, it will be simply be filled by some other provider, or in all likelihood, many new providers actually compe
    • by langelgjm (860756)

      You're skipping a step.

      Too small a fine, and it's just looked at as a cost of doing business.

      An appropriately-sized fine will make the cost of acting anti-competitively too much, which should motivate them to change their behavior.

      Only when the fine is absolutely too large, _and_ the chance of them incurring it is enough, will they decide to stop doing business there.

      I also doubt that a company like Intel would ever "stop doing business in the EU." Last time I checked, it was the world's largest unified mar

      • Intel could stop doing business directly in Europe, shutting down all plants and relying instead on distributors to sell product in Europe. No physical presence in Europe makes Intel very difficult to attack by law. Intel wins by causing Europeans to lose jobs, thereby punishing the government more than it can ever hope to punish Intel.
    • "the irony might be that the EU's actions result in reduced competition when a company simply packs up their products and leaves"

      War is Peace [studentsfororwell.org], Freedom Is Slavery, Ignorance Is Strength, anti-competition practices reduces competition.
    • But corporations are not emotional entities, they are controlled by their shareholders and Intel will not sulk and take their ball home from a market of 500M people just because that market has some marginally more strict rules on free markets than the US does. (which is ironic in itself)

      If a corporation gets into a position where it can bargain with a state on whether it follows the rules or not, we are *all* in serious trouble...

      • corporations are not emotional entities

        Ballmer. Ellison.

      • If a corporation gets into a position where it can bargain with a state on whether it follows the rules or not, we are *all* in serious trouble...

        OK, first you have to take off your blinders and realize that almost everything that runs up against the law is subject to negotiation. Ever hear of plea bargains?

        Second, although rule of law is preferable to rule by arbitrary force, the Procrustean approach is not a good thing. There are bad laws, and I would argue that most laws are severely defective or evil by

    • by MrMr (219533)
      By leaving you mean Intel would rather break the law than make a profit?
      At least that would show commitment.
  • Clearly the company's great founder Mr. Intel, is probably rolling in his grave right now. His vision of every child in Europe having his very helpful processor thwarted by moneygrubbers and kid-haters. Weep for Mr. Intel's lost vision.
  • by Greyfox (87712) on Thursday April 30, 2009 @12:59PM (#27774953) Homepage Journal
    Seems like if you're making tens of billions of dollars annually due to your dominance of the market, a piddly little couple billion dollar fine every few years is a small price to pay. The accusation against Microsoft, similarly, is that they just see the fine as a business expense. When the fine is a drop in the bucket, why not just pay the fine and keep doing what you're doing?
  • Are you telling that if Bob and Jim both are able to make a chip, and that Bob decides to offer
    a chip made for 10$ to a client for 8$ , thereby costing him 2$, yet netting him a good contract, and a foot in the door to make a good impression so that the next time , he will be able to charge 12$ for a 10$ chip, this is what we call anti - trust?

    Am i missing something here, or is the world falling apart?

    • Re: (Score:3, Informative)

      Am i missing something here, or is the world falling apart?

      Bob and Jim can both make chips for $10. Bob has $1000 in the bank, while Jim only has $300.

      Bob sells chips for $8, losing $2 on each sale. Because of this, Jim can't sell chips for more than $8, so he also has to lose $2 on each sale.

      Jim can only sell 150 chips at this price before going broke, while Bob can sell 500. So Jim goes broke first, and Bob raises his price to $20 per chip.

      Then some time later Jane wants to start selling chips. She can make chips for $8, but only has $50 in the bank because she's

      • Or Bob buy Jane, produce his new chip for 6 and sell them for 20 making a better profit. But it s not better for the public.
    • Re:WTF (Score:5, Informative)

      by Chatterton (228704) on Thursday April 30, 2009 @02:09PM (#27776185) Homepage
      No, this is called "Dumping [wikipedia.org]" and it is illegal in the states too.

You can measure a programmer's perspective by noting his attitude on the continuing viability of FORTRAN. -- Alan Perlis

Working...