EU Regulator Raids Intel Offices

stevedcc writes "BBC news is reporting that Intel's offices in Munich, Germany have been raided by European Union competition regulators. From the article: 'The Reuters news agency reported that the Commission also raided computer retailers on Tuesday including Germany's Media Markt, which sells PCs with Intel central processing units but not those made by AMD. Regulators have the power to fine Intel up to 10% of annual turnover if they find it guilty of stifling competition. Intel has said it is "confident" it had acted lawfully.'"

Re:The line forms to the right

[agent_no.82]

Except that given the situation here, the substantial costs of entering the CPU market mean that if Intel does end up bankrupting AMD, (which is quite close in performance outside the high range) there will be no serious competitors and thus significantly less incentive for them to continue a CPU arms race. Also, consumers will end up paying significantly more than they would otherwise.

Re:The line forms to the right

[explosivejared]

It's a little different when you're bailing out Goldman Sachs, which doesn't have an 800 lb gorilla of monopoly on its back like AMD does. Bailing out banks for insane lending creates moral hazard and positively reinforces bad behavior. Investing in AMD doesn't. It promotes competition and a more efficient market.

All those differentiations you speak about will suffer if there is only one manufacturer. And we all know how well the government busts up monopolies, so if you have any vested interest in CPU's, support AMD.

Please do tell how promoting an actual market is a misguided sense of "econ-101." Note I was speaking about the specific AMD situation when making my argument. I'm not here to argue if all things are equal between the two, just that having AMD around is important.

Re:Gone Too Far

[Otter]

As it happens, the EU was raiding pharmaceutical companies [corante.com] a few weeks ago over generics pricing issues. Sounds like they're getting pretty, err, proactive on antitrust issues over there...

Re:The line forms to the right

[RightSaidFred99]

That's the way the market works. Let's say AMD goes out of business and Intel raises prices. Suddently, there's a huge incentive for competitors to come up with something new and better. If Intel charges $1500 for a 3GHz 8-core processor supposing AMD goes out of business, they've taken CPUs further away from being a commodity item (which they're dangerously close to now). Suddenly not only the big players but the small research companies have an incentive to do something new to take a part of that market.

For example, they may develop a much faster incompatible chip which can run virtual machines emulating x86 at the same speed as a real x86 chip. Or they may just take AMD's IP and build on it to create a competitive chip and use someone else's fabs.

High prices from a monopoly on a non-supply limited item are part of the marketplace. It drives innovation. So in the end, I don't even find your "worst case" scenario all that bad. But on a realistic front, AMD isn't going out of business. Even if they bankrupt their products will still be made and sold for the forseeable future by _someone_.