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Intel Receives Record Fine By the EU 469

Posted by Soulskill
from the going-for-the-high-score dept.
Firefalcon writes "Intel has been fined a record 1.06 billion euros ($1.45 billion / £948 million) by the European Competition Commission after being found guilty of anti-competitive practices. This makes Microsoft's 497 million euro fine in 2004 (which was a record at the time) seem like a slap on the hand. Reports had previously suggested that the fine would be similar to Microsoft's. Intel was charged (among other things) with encouraging manufacturers and retailers to purchase fewer (or even not stock) AMD processors. More details of the ruling are on the European Commission's Competition website. Intel said they will appeal the fine."
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Intel Receives Record Fine By the EU

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  • by niceone (992278) * on Wednesday May 13, 2009 @08:56AM (#27936169) Journal
    1.066 GigaEuros - a number Intel can understand?
  • It's still just a slap on the wrist. They've profited an order of magnitude more from the illegal tactics they used, and this just says "It's ok to break the law, as long as you give us a cut of the profits".

    They should at least give a part of the fine to AMD to help them fight Intel -- that would hurt Intel a lot more than paying a fine to EU, and make them think twice before doing this again.

    • by Andy_R (114137) on Wednesday May 13, 2009 @09:05AM (#27936313) Homepage Journal

      This is just the fine for doing this in the EU, I'm sure the courts in the rest of the world will be happy to add their own penalties for their own jurisdictions, and I'm sure that in many jurisdictions AMD (and other chip makers) will be able to claim damages too.

    • by Pecisk (688001) on Wednesday May 13, 2009 @09:13AM (#27936423)

      Well, Euro fines doesn't work that way. First, you get initial warning and fine. After that, you got monitored for years for repeated abuse. If that happens - slap, another fine, possibly even bigger. In the end, Intel will have to comply. Because it's ain US, where you can drag out case in the court. You have to pay fine first.

    • Re: (Score:3, Insightful)

      by Hatta (162192)

      It's still just a slap on the wrist.

      Exactly. Send the board of Intel to prison, then we'll start seeing these corporations behave.

    • by ianare (1132971) on Wednesday May 13, 2009 @10:19AM (#27937341)

      Under the terms of the sentencing, intel has to stop these practices immediately, or face even more fines. As MS found out when they dragged their heels during their trial. This will hopefully have a much bigger effect than the fine, and could save AMD from extinction.

    • Re: (Score:3, Informative)

      by Hurricane78 (562437)

      Well, it is 3.84% of their 27.6 billion € revenue,
      and 27.25% of their 3.89 billion € net income.
      So it's a bit more than a slap on the wrist, and will hurt.

      But I agree that 100% of their income would be a better fine.

  • by rimcrazy (146022) on Wednesday May 13, 2009 @08:59AM (#27936221)

    I was the Director of Engineering for VLSI Technology's PC Chip set division back in the 80's. Back in those days, there were dozens of companies making chip sets for Intel CPU's and Intel, surprising as it may sound, did not. The chip set business was interesting in that it started with C&T. Zymos was second and VLSI was third. By the time we got into it, and in particular, after we were picked by IBM to be their chip set provider, the bay area VC market must have been swamped with business plans of every dog and his brother wanting to start a chip company making chip sets. If you can remember too, there were hundreds and I do mean hundreds of PC companies. Fast forward a few years. Things are now pretty crazy. VLSI made it to be the top chip set supplier but the competition was intense. The hundreds of PC companies has now fallen to around 10-12. The dozens of chip set companies has fallen to 4 or 5 but still no Intel. This is around the time that the Pentium first made its debut. Now, to make a chip set, you need these very important things called "Yellow Books" ( maybe they were Red.... hmm that was a few years ago) . These are the specifications of the next CPU from a "certain" CPU manufacturer. Without the yellow books, you can't make a chip set because you have no idea what the memory interface is going to look like. If you don't know the memory or peripheral interface you can't make a north bridge for sure and your south bridge is going to be a hack. Soooooo, it was at this time that we were working on our next generation chip set for the Pentium. We were going crazy because, for some very strange reason, we had yet to get the "Yellow Books". We could and did make educated guesses as to what the memory interface should be but we did not know for sure what it would look like. Well you know what? Gee, like magic, Intel announces and samples their Triton chipset. (Which we taught them in large part how to make pursuing a CF called Polar and Draco with Intel, but that is another story.... I digress) And Andy G. tells the press how Intel was just "forced" into making their own chip sets because the external chip set vendors just could not keep up. Oh yea, gee wizzz, we get the specs the same week you sample and yea, we just can't keep up can we. Where it really got interesting is when we got our chipset out and our sales team was trying to sell to our customers, which now as I said is a VERY short list, it seems a certain "I" company was bundling their chip sets with their CPU's. You, as a PC company, "could" buy just CPU's from them for price A or you could buy CPU's + Chip set for price B. I let you guess which was the larger. Oh, yea, and if you selected the A option. They ( the "I" company) could not guarantee delivery.

    So, we went from $250M/year in sales to $25M/year in sales in 12 months. Our division was decimated. I have never seen anything, short of last Octobers stock market, fall so hard and so fast.

    In retrospect, I don't blame Intel for getting into the chip set business. Hell, I am surprised actually it took them as long as it did but both the tactics they used, and quite frankly, the stupidity of the upper management at VLSI laid waste to an incredible group of people, and at the time, a great place to work. Ah, well. That's competition. It was fun while it lasted.

  • Why? (Score:5, Insightful)

    by masterfpt (1435165) on Wednesday May 13, 2009 @09:03AM (#27936281) Journal

    It must be really worth it for these big companies to risk millions in fines to making competition suffer.

    I always wondered if they really make that much more money (after the fine) or if what they really are after is the destruction of the competitor (AMD in this case)...

    • Re:Why? (Score:4, Insightful)

      by jollyreaper (513215) on Wednesday May 13, 2009 @10:25AM (#27937433)

      It must be really worth it for these big companies to risk millions in fines to making competition suffer.

      I always wondered if they really make that much more money (after the fine) or if what they really are after is the destruction of the competitor (AMD in this case)...

      It's amazing how many of these huge corporate decisions boil down into dick-stroking contests. You think that the major criteria in the decision-making process would be the welfare of the company, the shareholders, market conditions, a sober and rational look towards the future but no, not really. Often times the decisions are as addle-brained as some teenager crowing "Wow, this car will totally get me laid!"

  • Appeal the fine? (Score:3, Interesting)

    by erroneus (253617) on Wednesday May 13, 2009 @09:21AM (#27936563) Homepage

    I see nothing wrong with it... it is already rather appealing.

    The action against Microsoft does not seem to have hindered Microsoft's behavior in the slightest and so even though tremendously more aggressive than the action against Microsoft in the U.S., it was clearly not enough.

    It remains to be seen if the action against Intel will be at all effective.

    • Re: (Score:3, Insightful)

      by Splab (574204)

      Really? So why is MS Windows now shipping with options for browsers? IE is shipping with options for what search engine you want to use. It seems MS is actually paying very close to how they behave in EU, they after all risk having all their EU assets ceased...

  • Here's the kicker... (Score:3, Interesting)

    by JAlexoi (1085785) on Wednesday May 13, 2009 @09:31AM (#27936657) Homepage
    It's not even the maximum amount they could have fined them! The max amount is 10% of annual company revenue, for Intel that would be just below 4 billion Euros., since 2008 revenue was 37 billion
    And no, they cannot state that paying that fine would bankrupt them, since they have an estimated 10 billion in cash and securities.
    Or so states The Financial Times.
  • GOOD GOOD AND GOOD (Score:3, Insightful)

    by jabjoe (1042100) on Wednesday May 13, 2009 @09:51AM (#27936919)
    The EU is showing it has some balls to deal with anticompetitive practices.

    From my perspective this is good ammo against the Euro-skeptics in my own country. Big multinational companies like Intel couldn't care less about what a EU member state says, but if the EU works together it's a heavy hitter.
  • Long time coming. (Score:3, Interesting)

    by unity100 (970058) on Wednesday May 13, 2009 @10:08AM (#27937171) Homepage Journal

    South korea has already fined intel for the exact same crooked behaviour recently. eu is even late in doing it.

  • Can AMD sue now? (Score:4, Interesting)

    by DoofusOfDeath (636671) on Wednesday May 13, 2009 @11:12AM (#27938167)

    So it sounds like AMD doesn't get a cut of the EU's Intel fine.

    But does the finding of fact in the EU's ruling pave the way for AMD to nail Intel with some kind of civil suit?

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