EU Dives into Intel Antitrust Specifics

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The European Commission has just published a non-confidential version of its earlier decision that lead to a $1.45B fine. Intel appealed the decision claiming that evidence was “ignored or misinterpreted.” Intel responded to today's press release with the following:

"There is nothing new here. This Decision reflects the underlying bias we have come to expect from the case team that ran this investigation," Intel said. "The Commission relied heavily on speculation found in e-mails from lower level employees that did not participate in the negotiation of the relevant agreements," Intel said. "At the same time, they ignored or minimized hard evidence of what actually happened, including highly authoritative documents, written declarations and testimony given under oath by senior individuals who negotiated the transactions at issue."
 
What do you expect? The EU's gotta protect European companies like poor little AMD somehow! :rolleyes:

AMD's headquarters are based in Sunnyvale California. They have fabs in various parts of the world. I'm quite certain Intel does too. Ireland, Malaysia, Vietnam, China and Israel if I recall correctly.
 
I think people can agree or disagree with anti-trust regulations. Some will like it, and others won't.

But there is no doubt, based on the evidence presented, that intel violated the EC's antitrust laws. People can certainly make a case against EC's antitrust laws, but there is no doubt they were violated.
 
AMD's headquarters are based in Sunnyvale California. They have fabs in various parts of the world. I'm quite certain Intel does too. Ireland, Malaysia, Vietnam, China and Israel if I recall correctly.

Why don't you shut the hell up? How are people supposed to demonstrate how much the EU sucks if you keep bringing up these "facts"? :D
 
TG Daily has a longer summary:

http://www.tgdaily.com/content/view/44043/118/

The European Commission has finally gotten around to publishing a non-confidential version of its Intel Decision, dating back to 13 May 2009 that found Intel broke EC Treaty antitrust rules by engaging in two types of illegal practise to exclude competitors from the market.

Intel is appealing the ruling.

These practices 'harmed consumers throughout the EEA. By undermining its competitors' ability to compete on the merits of their products, Intel's actions undermined competition, reduced consumer choice and hindered innovation,' says the document.

"Intel abused its dominant position in the x86 CPU market by implementing a series of conditional rebates to computer manufacturers and to a European retailer and by taking other measures aimed at preventing or delaying the launch of computers based on competing products (so-called 'naked restrictions'), continues the document.

EU antitrust details published

"The Commission's Decision outlines specific cases of these conditional rebates and naked restrictions, as well as how Intel sought to conceal its practices and how computer manufacturers and Intel itself recognised the growing threat represented by the products of Intel's main competitor, AMD."

The EU says that Intel rebates to Dell from December 2002 to December 2005 were conditioned on Dell purchasing exclusively Intel CPUs. For example, in an internal Dell presentation of February 2003, Dell noted that should Dell switch any part of its CPU supplies from Intel to its competitor AMD, Intel retaliation "could be severe and prolonged with impact to all LOBs [Lines of Business]."

In a February 2004 e-mail on the consequences of the possible purchase by Dell of AMD CPUs, a Dell executive wrote: "Boss, here's an outline of the framework we discussed with Intel. (…) Intel is ready to send [Intel Senior executive] /[Intel executive] /[Intel executive] to meet with [Dell Senior Executive]/[Dell Senior Executive]/[Dell Executive] . (...) Background: [Intel Senior executive] /[Intel Senior executive] are prepared for [all-out war] 1 if Dell joins the AMD exodus. We get ZERO MCP [name of Intel rebate to Dell] for at least one quarter while Intel 'investigates the details' (...) We'll also have to bite and scratch to even hold 50 percent, including a commitment to NOT ship in Corporate. If we go in Opti [Dell product series for corporate customers], they cut it to <20 percent and use the added MCP to compete against us. "

Intel rebates to HP from November 2002 to May 2005 were conditioned in particular on HP purchasing no less than 95 percent of its CPU needs for business desktops from Intel (the remaining five percent that HP could purchase from AMD was then subject to further restrictive conditions set out below). In this regard, in a submission to the Commission, HP stated that " Intel granted the credits subject to the following unwritten requirements: a) that HP should purchase at least 95 percent of its business desktop system from Intel …".

By way of example, in an e-mail written in July 2002 during the negotiation of the rebate agreement between HP and Intel, an HP executive wrote: "PLEASE DO NOT… communicate to the regions, your team members or AMD that we are constrained to five percent AMD by pursuing the Intel agreement".

Rebates

Intel rebates to NEC during the period ranging from October 2002 to November 2005 were conditioned on NEC purchasing no less than 80 percent of its CPU needs for its desktop and notebook segments from Intel. For example, in a May 2002 e-mail (when the arrangement was concluded), an NEC executive specified that " NEC will (...) increase [worldwide] Intel market share from [...] percent to 80 percent. Intel will give NEC [support] and aggressive [...] price.".

Intel rebates to Lenovo during year 2007 were conditioned on Lenovo purchasing its CPU needs for its notebook segment exclusively from Intel. For example, in a December 2006 e-mail, a Lenovo executive stated: " Late last week Lenovo cut a lucrative deal with Intel. As a result of this, we will not be introducing AMD based products in 2007 for our Notebook products".

Intel payments to Media Saturn Holding (MSH), Europe's largest PC retailer, were conditioned on MSH selling exclusively Intel-based PCs from October 2002 to December 2007. For example, in a submission to the Commission, MSH stated: "It was clear to MSH in this regard that the sale of AMD-equipped computers would result at least in a reduction of the amount of Intel's contribution payments per Intel CPU under the contribution agreements (and thus in a reduction of the total payments received from Intel, even if the total volume of Intel-CPUs sold by MSH would have remained the same as in previous periods), although MSH never actually tested the issue with Intel.".

Do not use AMD in the channel

Between November 2002 and May 2005, Intel payments to HP were conditioned on HP selling AMD-based business desktops only to small and medium enterprises, only via direct distribution channels (rather than distributors), and on HP postponing the launch of its first AMD-based business desktop in Europe by 6 months. For example, in an internal September 2004 HP e-mail, an HP executive stated: " You can NOT use the commercial AMD line in the channel in any country, it must be done direct. If you do and we get caught (and we will) the Intel moneys (each month) is gone (they would terminate the deal). The risk is too high ".

Intel payments to Acer were conditioned on Acer postponing the launch of an AMD-based notebook from September 2003 to January 2004. For example, in a September 2003 email, an Intel executive reported: "good news just came from [Acer Senior Executive] that Acer decides to drop AMD K8 [notebook product] throughout 2003 around the world. We've been talking with them all the way up to [Intel senior executive] 's […] level recently including [Intel executive] , [Intel senior executive] … and [Intel executive]… . They keep pushing back until today, after the call with [Intel executive] this morning, [Acer Senior Executive] just confirmed that they decide to drop AMD K8 throughout 2003 around the world. [Acer Senior Executive] has got this direction from [Acer Senior Executive] as well and will follow through in EMEA [Europe Middle East and Africa region]".

Intel payments to Lenovo were linked to or conditioned on Lenovo postponing the launch of AMD-based notebooks from June 2006 to the end of 2006. For example, in a June 2006 e-mail, a Lenovo executive reported that: "[two Lenovo executives] had a dinner with [an Intel executive] tonight (…). […] When we asked Intel what level of support we will get on NB [notebook] in next quarter, [he] told us (…) the deal is base[d] [sic] on our assumption to not launch AMD NB [notebook] platform. (…) Intel deal will not allow us to launch AMD".

EU publishes details of Intel case

Concealment

The Commission found that Intel generally sought to conceal the conditions in its arrangements with PC manufacturers and MSH. For example, the rebate arrangement with Dell was not subject to a written agreement but was concluded orally at various meetings. In this regard for example, in a submission to the Commission, Dell stated that "there is no written agreement between Intel and Dell concerning the MCP [rebate] discount, rather, the discount is the subject of constant oral negotiations and agreement".

There was a written agreement with HP but the relevant conditions remained unwritten. In this regard for example, in a submission to the Commission, HP stated that the " unwritten conditions (...) were stated to be part of the HPA1 agreement by [Intel executive] , [Intel executive] and [Intel senior executive] in meetings with HP during the negotiations;

The written agreement with MSH contained a provision that the deal was non-exclusive. However, the evidence demonstrates that at Intel's request, the arrangement was in fact exclusive. In this regard for example, in a submission to the Commission, MSH stated that "It was clear to MSH that despite the non-exclusivity clause the exclusive nature of the relationship remained, for Intel, an essential element of the relationship between Intel and MSH. In fact, [MSH executive] recalls that Intel representatives made it clear to him that the changes in the wording of the agreement had been requested by Intel's legal department, but that in reality the relationship was to continue as before, including the requirement that MSH sell essentially only Intel-based computers."

Other statements from computer manufacturers and MSH outline how the various Intel conditions were an important factor in their decisions not to partially switch to or buy more x86 CPUs from AMD, Intel's main competitor in the x86 CPU market. For instance, in a submission to the Commission, HP stated that it " can confirm that Intel's inducements (in particular the block rebates) were a material factor in determining HP's agreement to the unwritten conditions. As a result (...) HP [Business desktop PC division] stayed at least 95 percent aligned to Intel."

AMD's growing threat

The evidence in the Decision indicates the growing threat that AMD's products represented to Intel, and that Intel's customers were actively considering switching part of their x86 CPU supplies to AMD. For example, in an October 2004 e-mail from Dell to Intel, a Dell executive stated that "AMD is a great threat to our business. Intel is increasingly uncompetitive to AMD which results in Dell being uncompetitive to [Dell competitors].

"We have slower, hotter products that cost more across the board in the enterprise with no hope of closing the performance gap for 1-2 years." In a submission to the Commission, Dell also stated that as regards Opteron, "in Dell's perception this CPU generally performed approximately […] better than the comparable Intel Xeon CPU at the time." As regards AMD's Athlon PC CPU, an internal HP presentation from 2002 stated that it "had a unique architecture", was "more efficient on many tasks", and had been "CPU of [the] year [for] 3 consecutive years".

The fact that AMD had improved its products is also recognised by Intel itself. For example, in a 2005 submission to the Commission, Intel stated that " AMD improved its product offerings dramatically with the introduction of its successful Opteron processor". This is also confirmed by contemporaneous documents from Intel. For example, in a 2004 internal Intel e-mail, it is stated that "Opteron is real threat today… Opteron-based single WS [Workstation] benchmarks beat [Intel's] Xeon in all cases."

Before the Commission adopted its final Decision, it carried out a comprehensive investigation of the facts. During the proceedings Intel was able to comment fully on all the Commission's evidence outlined in the Decision. Indeed, the Commission went beyond its legal obligations in safeguarding Intel's rights of defence. For example, despite the fact that Intel chose not to reply to the Commission's supplementary Statement of Objections by the extended deadline of 17 October 2008 but instead sought to suspend the Commission's case, the Commission took full account of Intel's belated written submissions relating to the supplementary Statement of Objections.

The full text of the decision is available on the Europa website.
 
The truth probably lies somewhere in the middle.

The EU had dollar (pound) signs in it eyes and Intel wasn't exactly the model of honesty.

In the end this does nothing for the little people which is where my frustration comes from.
Don't sit there EU and claim to be defending the rights of the little guy by going after Intel's deep pockets. We won't see a single penny of any settlement.

More over CPU prices were pretty damn competitive during the time frame all this supposedly took place.

I'm not saying what Intel did was right/wrong but the EU isn't some righteous organization fighting the good fight for little Johnny.
 
The truth probably lies somewhere in the middle.

The EU had dollar (pound) signs in it eyes and Intel wasn't exactly the model of honesty.

In the end this does nothing for the little people which is where my frustration comes from.
Don't sit there EU and claim to be defending the rights of the little guy by going after Intel's deep pockets. We won't see a single penny of any settlement.

More over CPU prices were pretty damn competitive during the time frame all this supposedly took place.

I'm not saying what Intel did was right/wrong but the EU isn't some righteous organization fighting the good fight for little Johnny.


People in the EU will pay lower taxes because of this. Also why do so many people feel so threatened when a corporation is held accountable? It's pathetic how you humanize the EU (and corporations) and somehow read "the EU's" mind and can tell they just wanted money. God you're stupid.
 
If only they were giving the money to AMD instead of lining their pockets.
I don't know how anyone could think of this as justice.
 
No one can read the report and say Intel was an angel in this and EU is just after a cash grab.

Maybe what Intel did is legal in the US (I highly doubt that)... but if your a business you follow the rules in the country your doing business in. Which is why US companies have to abide by Chinese or any other country's laws. Intel violated and tried to conceal their illegal activities in the EU. They got caught. Frankly the EU should drag em over the coals and shake em down for as much as they can get and then some. I have no love for any corporation which gains market share by illegal means. And once the EU is done let AMD go after em as well or any other business that got black balled into buying Intel over AMD.

Without the threat of losing all their profits and then being fined for more, companies will always cheat and break the law as long as they can factor in the piddly fines governments slap em with, they will just build that into their cost of doing "business".

If only the US Justice department will get off their ass and look at Intel as well, instead of always watching MS or Google.
 
If only they were giving the money to AMD instead of lining their pockets.
I don't know how anyone could think of this as justice.

Cause there is a difference between criminal justice and civil justice.

If I beat the snot out you and got caught and convicted... any fines I pay will go to the state not you. So being caught and convicted isnt justice? You have the choice to bring a civil suit against me thou if you want the $. Same for AMD.
 
BettiePage said:
Cause there is a difference between criminal justice and civil justice.

If I beat the snot out you and got caught and convicted... any fines I pay will go to the state not you. So being caught and convicted isnt justice? You have the choice to bring a civil suit against me thou if you want the $. Same for AMD.

The civil suit is set to go on trial in March.
 
The truth probably lies somewhere in the middle.

The EU had dollar (pound) signs in it eyes and Intel wasn't exactly the model of honesty.

In the end this does nothing for the little people which is where my frustration comes from.
Don't sit there EU and claim to be defending the rights of the little guy by going after Intel's deep pockets. We won't see a single penny of any settlement.

More over CPU prices were pretty damn competitive during the time frame all this supposedly took place.

I'm not saying what Intel did was right/wrong but the EU isn't some righteous organization fighting the good fight for little Johnny.

the issue is not cpu prices the issue is intel's use of its monopolistic position to LOCK out amd whom at the time had the better performing product that is the issue
 
grr no edit... in the netburst era intel should of lost way more market share than it did if intel just sucked it up and took the market share loss amd would probably be in a even better position than it is now
 
Honestly I think this is about the EU wanting 1.45B of Intel's money. Having the EU, who would receive the money, also conduct the investigation and trial is a sign of injustice. And this is from a big AMD fan.
 
Honestly I think this is about the EU wanting 1.45B of Intel's money. Having the EU, who would receive the money, also conduct the investigation and trial is a sign of injustice. And this is from a big AMD fan.

So your saying that no government in the world can impose and collect any monetary fines against any company/person they investigate and prosecute?

So the US government cant investigate folks who avoid paying their fair share of income taxes... and expect to collect fines if they convict em? That is just one example. You need to look at the bigger picture here and see that any and all governments investigate alleged crimes then prosecute them and collect fines. It could be anything from bad tires to bad food... governments always investigates and if they feel a company is committing a crime they will slap em with the law and on conviction slap a fine on em.

And if you think 1.45B is a lot of money... it is a lot, but if you look at how much profit Intel made during the time of these "incentives", they made a ton more than that. Even if Intel paid double that fine... they would still have made a profit.
 
No that would be the EU. US lost that title in 2007. US still largest economy for a single country... but the EU together is bigger. Sum of the parts larger... Now if you compared NAFTA to EU... but then most Americans think Canada and Mexico don't really count :)

Thou in the future... China will take that title. Heck they could take both.
 
That would be the USA, not EU.

Nope

If considered as a single economy, the EU generated an estimated nominal gross domestic product (GDP) of US$18.39 trillion (15.247 trillion international dollars based on purchasing power parity) in 2008, amounting to over 22% of the world's total economic output in terms of purchasing power parity,[12] which makes it the largest economy in the world by nominal GDP and the second largest trade bloc economy in the world by PPP valuation of GDP. It is also the largest exporter ,[112] and largest importer[113] of goods and services, and the biggest trading partner to several large countries such as India and China.

http://en.wikipedia.org/wiki/EU#Economy
 
bruce_sewell_intel_bio.jpg


"Sewell served as Intel's general counsel since 2001 and had served on the company's legal team since 1995. Most recently, he has been working on an appeal for the huge fine levied by the European Union for anticompetitive practices. Prior to working for Intel, he was a partner with Brown and Bain PC, which Fortune notes was the law firm that represented Apple in its "look and feel" case against Microsoft over copying of the Mac's GUI."

Why would someone who was working with Intel during the time of the anticompetitive practices jump ship during the appeal before the EU and just months before the climactic AMD-Intel trial???
 
You mean aside from lock them out largest economy in the world?

What would the largest economy do then? Use slower, more power hungry processors? Not exactly in line with the "green image" they are trying to push.
 
What would the largest economy do then? Use slower, more power hungry processors? Not exactly in line with the "green image" they are trying to push.

Slower, more power hungry, what???
 
In my book Intel has a long-term good reputation.
In my book the EU anti-trust commission has a short-term (because they haven't been around long) very bad reputation.

So I really don't care about the evidence, I can't trust a word that commission says so for what little it matters, which is not at all, I believe Intel is in the right on this one.
 
In my book Intel has a long-term good reputation.
In my book the EU anti-trust commission has a short-term (because they haven't been around long) very bad reputation.

So I really don't care about the evidence, I can't trust a word that commission says so for what little it matters, which is not at all, I believe Intel is in the right on this one.

Yeah... that's your book.

The EU has hard evidence that Intel is denying ever happened, despite that fact it wasn't just between Intel and one company, but Intel and several companies.

If you don't care about evidence... I'm pretty sure we can mock up a way to claim you killed somebody in cold blood, in Texas...
Your evidence, won't be considered.


The fact is, evidence is there, despite what Intel says it was doing (also behind closed doors...).
 
First, why this idea that the EU is doing it for the money? It's not like any of the people within the EU administration will get a share of it.

Second, anti trust regulations were decided on by the members of the EU. If the laws are on the books, why wouldn't the EU prosecute intel? "OMG, i7 is soooo rad we should exempt intel from our laws?"

Third, the period in question was when AMD actually performed better than Intel, and Intel used its size to prevent AMD from getting a larger share of the market. We can argue what is acceptable anti trust legislation for a long time, but it seems to me that intel's practices in question are the most egregious forms of anti-competitive matters, which is conditioning services and payments to a boycott of another company.
 
if your gonna use wikipedia... here is one with GDP (nominal)

of the 3 tables EU leads the US. The one where US leads is only ahead by 700,000 by the World Bank. EU leads on the charts provided by the IMF and the CIA World factbook.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

read the footnootes. the world bank chart only includes the "eurozone," or the zone that is not only a member of the EU, but also has switched to euros as currency. As such, it only includes 15 of the 27 EU members.

When counted as a single entity, the EU is, without any doubt, and by any measure, the largest economy in the world.
 
You mean aside from lock them out largest economy in the world?

Really they are gonna lock out the worlds premiere chip maker? That is laughable, and I seriously thing that customers who want to buy Intel would be very pissed at their government.

It won't come to that and would be cheaper for Intel to pay, but saying they would lock the best chipmaker out is crazy.
 
The way I look at it is Intel was doing people a favor by limiting them from being stuck with AMD CPUs. :p
 
Really they are gonna lock out the worlds premiere chip maker? That is laughable, and I seriously thing that customers who want to buy Intel would be very pissed at their government.

It won't come to that and would be cheaper for Intel to pay, but saying they would lock the best chipmaker out is crazy.

why would the EU need to lock em out for if Intel doesnt pay... Intel has assets in EU. Last I checked assets have monetary value. And I am sure the EU and US have agreements in place to support and enforce judgments.
 
AMD's headquarters are based in Sunnyvale California. They have fabs in various parts of the world. I'm quite certain Intel does too. Ireland, Malaysia, Vietnam, China and Israel if I recall correctly.

the problem isnt the EU trying to protect/give advantage to European companies, the problem is the EU trying to fine foreign companies just for the sake of lining its own pockets
 
the problem isnt the EU trying to protect/give advantage to European companies, the problem is the EU trying to fine foreign companies just for the sake of lining its own pockets

I know. I was disputing someone else's reason that AMD is EU's baby. They're not.
 
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