Intel Reportedly to Receive Heavy EU Fine

vengence said:
Because you've made the "brilliant" assumption that every dollar of profit they made was a direct result of this. That they would have made zero dollars profit if they had not done this. You've also made the assumption that they believed thier actions to be illegal when they did them. I would venture there is at least even money that thier lawyers told them what they were doing was techincally legal.
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*bangs head on wall repeatedly*

Who the hell assumed that? If that was the assumption then I would have been pushing a $40Billion dollar fine.

Moreso, you're acting as if we shouldn't punish crimes simply because they weren't successful. What do YOU think the potential gain is for forcing your only competition out of a multi-billion dollar PER YEAR market? Who the hell cares if they made a single cent from it up to this point. Hell, they probably haven't.

DESTROYING AMD WOULD RESULT IN TENS OF BILLIONS OF DOLLARS OF ADDITIONAL PROFIT OVER THE NEXT FEW DECADES.

Where is the difficulty in understanding this. You destroy competition so you can jack up prices. Intel didn't do this because they wanted to get lower pricing out there, they did this because if there was no AMD they could double their margins and noone could do anything about it.

Intel comitted a crime in order to generate billions in additional profits. Even if they were yet to see the benefits, it doesn't mean you don't fine them on the potential benefits. These potential benefits are the "reward" in risk vs reward. If you only punish based on what they've already gained then where the hell is the deterrent?

"Ohh, gee guys, you tried to rob the bank but got caught before you actually got any money, so we're just gonna give you a $50 fine, sound good?"
 
vengence said:
Please enlighten me. Is the risk not greater than the reward if the fine is 1,000,000$? So then I am to assume that you do not have a problem with a 1,000,000$ fine for speeding? This is a perfectly acceptable "deterent" and income stream for struggling cities.
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Yes, the risk is far greater then the reward. It would be an excellent deterrent.

But unlike your extreme example, the risk and the reward for Intel were on a similar scale.
 
Nemesis999 said:
*bangs head on wall repeatedly*

Who the hell assumed that? If that was the assumption then I would have been pushing a $40Billion dollar fine.

Moreso, you're acting as if we shouldn't punish crimes simply because they weren't successful. What do YOU think the potential gain is for forcing your only competition out of a multi-billion dollar PER YEAR market? Who the hell cares if they made a single cent from it up to this point. Hell, they probably haven't.

DESTROYING AMD WOULD RESULT IN TENS OF BILLIONS OF DOLLARS OF ADDITIONAL PROFIT OVER THE NEXT FEW DECADES.

Where is the difficulty in understanding this. You destroy competition so you can jack up prices. Intel didn't do this because they wanted to get lower pricing out there, they did this because if there was no AMD they could double their margins and noone could do anything about it.

Intel comitted a crime in order to generate billions in additional profits. Even if they were yet to see the benefits, it doesn't mean you don't fine them on the potential benefits. These potential benefits are the "reward" in risk vs reward. If you only punish based on what they've already gained then where the hell is the deterrent?

"Ohh, gee guys, you tried to rob the bank but got caught before you actually got any money, so we're just gonna give you a $50 fine, sound good?"
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So by your envolving logic, the fine is clearly not big enough?
 
vengence said:
Because you've made the "brilliant" assumption that every dollar of profit they made was a direct result of this. That they would have made zero dollars profit if they had not done this. You've also made the assumption that they believed thier actions to be illegal when they did them. I would venture there is at least even money that thier lawyers told them what they were doing was techincally legal.
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He also made the assumption that intel does all of its business in EU, as such, the EU has used the metric of global gross income to fine intel.
 
I dont quite understand how anyone can try and predict the potential profit or lack of profit that results from practices employed by intel. Heck, we have a hard enough time predicting the economy, dont try telling me that all of a sudden we can predict a companies profit that correctly.


these ani-trust cases are always fun to follow comments, getting alot of charged arguments.

while anti-trust laws in the US and EU are neccesary, its a very fine line they are balancing. How do we decide how big a company can get before certain business practices are wrong. Eventually, a company gets so big that they can no longer grow, resulting in a stagnate majority in the market and allowing a minority company to innovate and grow in the mean time.

The ideas behind the rules is justified, but there are times when the EU (and US) goes too far and in effect create a market that promotes the minority companies when the majority company earns its dominant position through legal practices. Im not saying this is the case here becuase the evidence so far seems pretty solid, but this isnt always the case.

Finally, I agree that if the EU doesnt give a significant portion of the fine to the company (s) affected by the larger company, then the whole thing seems like a money grab. I dont care if its the US or EU, if there is a fine levied agaisnt a company, the victim company(s) should get a very large piece of that. If your really looking for justice for the companies and consumers that might use them, then part of that would be by awarding them damages.
 
trooper11 said:
I dont quite understand how anyone can try and predict the potential profit or lack of profit that results from practices employed by intel. Heck, we have a hard enough time predicting the economy, dont try telling me that all of a sudden we can predict a companies profit that correctly.
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Intel's profit margins are in the range of 20%
AMD's revenue is in the range of $7 Billion.

I think it's pretty safe to say that If AMD collapsed Intel would see additional billions in profits, even if they didn't use the opportunity to jack up margins.
 
Nemesis999 said:
Intel's profit margins are in the range of 20%
AMD's revenue is in the range of $7 Billion.

I think it's pretty safe to say that If AMD collapsed Intel would see additional billions in profits, even if they didn't use the opportunity to jack up margins.
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of course thats true, but my question is, how long do you prop up a minority position just for the sake of 'competition'. Im not saying we are at that point with AMD, they still have the oppurtunity to get back into the game big time, but hypothetically. There are times when one company is so dominant becuase the competition simply hasnt been able to step up. At some point, in order to protect competition, a government would be forced to step in and either find the majority company guilty of illegal practices, fund the minority company in the hope of a turnaround, or let the minorty company fail.

I just hope it doesnt come to that in the case of AMD and Intel. Id prefer they duke it out in the realm of good products, not be propped up just for the sake of having a competitor in name.
 
Nemesis999 said:
Intel's profit margins are in the range of 20%
AMD's revenue is in the range of $7 Billion.

I think it's pretty safe to say that If AMD collapsed Intel would see additional billions in profits, even if they didn't use the opportunity to jack up margins.
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Last quarter Intel had a total Revenue of 7.145B, they had a net of +647M, that makes for a profit margin of 9%.

Furthermore, AMD is already effectively dead. When AMD dies, and unless AMD pulls something major out of thier R&D it's a when, not an if, Intel will then be in real trouble. Because right now, Intel doesn't have a monopoly. They would be instantly regulated to 5% or less profit margin, otherwise they will be instantly targeted by a senator wanting to make a name for himself.

Intel has no intentions of killing AMD, they want to keep AMD exactly where they are now.

Furthermore, AMD's revenue is not 7B. It was 5.8B last YEAR, last quarter it was just 1.227B. They year before that it was 6.0B, the year before that it was 5.6B.

Please, please, get your facts straight.
 
trooper11 said:
of course thats true, but my question is, how long do you prop up a minority position just for the sake of 'competition'. Im not saying we are at that point with AMD, they still have the oppurtunity to get back into the game big time, but hypothetically. There are times when one company is so dominant becuase the competition simply hasnt been able to step up. At some point, in order to protect competition, a government would be forced to step in and either find the majority company guilty of illegal practices, fund the minority company in the hope of a turnaround, or let the minorty company fail.

I just hope it doesnt come to that in the case of AMD and Intel. Id prefer they duke it out in the realm of good products, not be propped up just for the sake of having a competitor in name.
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This isn't stuff that happened over the last year. This was back when AMD was killing Intel in price/performance and still couldn't sell their CPUs because the OEMs were afraid of Intel.

At one point HP refused 1 million FREE CPUs from AMD because the retaliation from Intel for selling AMD products would still make it unprofitable.
 
Nemesis999 said:
This isn't stuff that happened over the last year. This was back when AMD was killing Intel in price/performance and still couldn't sell their CPUs because the OEMs were afraid of Intel.

At one point HP refused 1 million FREE CPUs from AMD because the retaliation from Intel for selling AMD products would still make it unprofitable.
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Oh I know that, like I said in my post, I was speaking hypthetically, not about the situation as it is for Intel and AMD.

For years Ive felt that these practices have been going on, so if they are indeed going on (or were), then Intel has to pay the price.

My point was htat if they doesnt save AMD and they were to go down hill, do you artificially support the company just to preserve 'competition' or do you let it fail? If it fails, then you would be faced with artifically creating a competitive alternative or allowing the market to produce a new competitor.
 
vengence said:
Last quarter Intel had a total Revenue of 7.145B, they had a net of +647M, that makes for a profit margin of 9%.
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And nothing says "typical results" like the numbers as you enter a crushing recession! :rolleyes:


Furthermore, AMD is already effectively dead. When AMD dies, and unless AMD pulls something major out of thier R&D it's a when, not an if, Intel will then be in real trouble.
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So your argument is that Intel was successful and therefor shouldn't be punished?

Because right now, Intel doesn't have a monopoly. They would be instantly regulated to 5% or less profit margin, otherwise they will be instantly targeted by a senator wanting to make a name for himself.
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Ya.... No.

Intel has no intentions of killing AMD, they want to keep AMD exactly where they are now.
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And who put them here? Maybe nearly a decade of paying OEMs not to buy their products just might have something to do with it...

Furthermore, AMD's revenue is not 7B. It was 5.8B last YEAR, last quarter it was just 1.227B. They year before that it was 6.0B, the year before that it was 5.6B.

Please, please, get your facts straight.[/QUOTE]

*yawn*

I love how you ignore the fact that Intel still gains billions in profits and try to pass it off as nothing.

I'm not sure if you're a troll or just purposely ignorant, either way you're obviously ignoring the fact that Intel's gains from AMD's failure, which was obviously Intel's goal, has brought, and will bring them billions in profits.
 
trooper11 said:
Oh I know that, like I said in my post, I was speaking hypthetically, not about the situation as it is for Intel and AMD.

For years Ive felt that these practices have been going on, so if they are indeed going on (or were), then Intel has to pay the price.

My point was htat if they doesnt save AMD and they were to go down hill, do you artificially support the company just to preserve 'competition' or do you let it fail? If it fails, then you would be faced with artifically creating a competitive alternative or allowing the market to produce a new competitor.
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If AMD fails the odds a new competitior coming into existance on it's own is essentally nothing. Intel controls x86, AMD only got to compete in the first place because IBM was worried about Intel doing.... well exactly what they did, abusing their power.

AMD isn't dead, far from it. Losing a couple billion doesn't mean much in the business world, especially once the world leaves the current recession. That kind of funding is pretty easy to get if they can prove viable products. There is still plenty of faith in AMD, as shown by their stock doubling since the beginning of the year. They're down but not out, at least not yet.

If AMD fails then there should be some kind of mandatory licensing requirement for x86, otherwise Intel has won regardless of the huge fines. There are plenty of businesses who could compete, just none that Intel would ever allow to compete, especially considering they've spent the last decade breaking the law in order to get rid of their only competition. As for proping up a company for the sole purpose of competition, hell no. That just means more taxes to funnel money into another poorly run company, just like taxes are funneled into a poorly run government.
 
Nemesis999 said:
*yawn*

I love how you ignore the fact that Intel still gains billions in profits and try to pass it off as nothing.

I'm not sure if you're a troll or just purposely ignorant, either way you're obviously ignoring the fact that Intel's gains from AMD's failure, which was obviously Intel's goal, has brought, and will bring them billions in profits.
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I know you were responding to another poster, but I wanted to add this: Based on your number though, in order for this to be a 'fair' fine, wouldnt the fine need to be much larger? wouldnt 2 billion be low compared to their profits at this point and for the near future? It pretty much tarnishes their entire company. Its impossible to really know what profits were from these practices and which ones were not, so youd have to ASSUME whatever level of effect you wanted.
 
trooper11 said:
I know you were responding to another poster, but I wanted to add this: Based on your number though, in order for this to be a 'fair' fine, wouldnt the fine need to be much larger? wouldnt 2 billion be low compared to their profits at this point and for the near future? It pretty much tarnishes their entire company. Its impossible to really know what profits were from these practices and which ones were not, so youd have to ASSUME whatever level of effect you wanted.
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It's not like they just guessed at a number. They've been investigating Intel for over half a decade, I'm sure they did more then just pick a few numbers based on prior profits.

The reality is if AMD collapses or remains permanently marginalized then Intel likely will still win in the long run. The world is unlikely to break free of x86 anytime soon.
 
Nemesis999 said:
It's not like they just guessed at a number. They've been investigating Intel for over half a decade, I'm sure they did more then just pick a few numbers based on prior profits.

The reality is if AMD collapses or remains permanently marginalized then Intel likely will still win in the long run. The world is unlikely to break free of x86 anytime soon.
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Of course they didnt just pull the number out of nowhere, but I dont think it can really reflect potential profits from those practices. So in that respect, that 2 billion number could be really low and not fair at all.


I personally dont want to see AMD go away, but lately they have been doing alot of things to stay afloat and its hard not to see that its getting very difficult for them to innovate and keep up with Intel's 'tick tock' strategy. Lowering prices may be an illegal move by Intel, but thier sheer capacity adavantages give them the firepower to push a competitor around as long as they dont screw it up with flawed designs. Thats where I think these anti-trust issues are at odds. Its well intentioned and all, but the fact is sometimes you just cant avoid a monopoly without a government body stepping in and introducing artifical rules or barriers.
 
Nemesis999 said:
If AMD fails the odds a new competitior coming into existance on it's own is essentally nothing. Intel controls x86, AMD only got to compete in the first place because IBM was worried about Intel doing.... well exactly what they did, abusing their power.
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Except AMD owns the liscense for x86-64, which will basically covers every desktop processor for the next couple of decades.

The reality is if AMD collapses or remains permanently marginalized then Intel likely will still win in the long run. The world is unlikely to break free of x86 anytime soon.
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Except that x86 doesn't cover 64 bit processors x86-64 does which AMD owns.

I'm not sure if I can even take you serious anymore.
 
If I was Intel there'd be a nice little clause in the EULA of windows 7 - "This product is not to be sold, purchased, given, possessed, or used on any person or personal computer anywhere within the confines of the European Union"

Once those EU idiots have to use Linux they'll stop giving MS shit.
 
computerpro3 said:
If I was Intel there'd be a nice little clause in the EULA of windows 7 - "This product is not to be sold, purchased, given, possessed, or used on any person or personal computer anywhere within the confines of the European Union"

Once those EU idiots have to use Linux they'll stop giving MS shit.
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Huh? I thought we were watching Nemesis999 and everyone else flame each other about Intel and the EU not MS and EU. And since when does Intel have any right to say what goes into the EULA of a Microsoft product?

Now, if this is flame bait, then well played sir. ;)
 
petertew said:
Huh? I thought we were watching Nemesis999 and everyone else flame each other about Intel and the EU not MS and EU. And since when does Intel have any right to say what goes into the EULA of a Microsoft product?

Now, if this is flame bait, then well played sir. ;)
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;););)
 
computerpro3 said:
If I was Intel there'd be a nice little clause in the EULA of windows 7 - "This product is not to be sold, purchased, given, possessed, or used on any person or personal computer anywhere within the confines of the European Union"

Once those EU idiots have to use Linux they'll stop giving MS shit.
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LOL, what would you do if you were AMD?
 
A few points:

M$, and now Intel, are the bank of last resort for the EU.

There isn't a company on earth right now that can afford to pay up such a fine, and a fine that large is a hefty part of a new fab.

This is real anti-Americanism, even if they are "guilty" of said malfeasance, because of the size of the fine, even taking into account inflation and the worthlessness of the dollar.

Intel can not afford to stop selling processors in that market.

Intel is getting nuts though with their going after nvidia on chipsets and AMD on x86 licensing. These lawsuits are a greater threat to the tech sector than any bad marketing practices and backroom deals. This fine does not address that, but merely lines the pockets of the EU to sustain their bankrupt anti-American socialist regimes. Can we hit the reset button? In the end no one wins here, whatever side you are on. It's not like AMD is suddenly going to start making excellence, or bad actors --people with useless degrees ala MBA's, JD's and marketing goons-- in corporations are going to start playing nice doggy.
 
I figured I'd step in and offer insight from the rational choice and deterrence theory of crime perspective...

The belief that punishment is an effective means of social control stems from the classical theorists Beccaria and Bentham. They guys thought that people were free to make choices and that humans calculated choices based on cost:benefit analysis. You may have learned about the Hedonistic Calculus in philosophy class. Utilitarian philosophers, like Mills, picked up on this concept. There are other factors besides those two, but those are the main ones relevant to this discussion.

There are two forms of deterrence: specific and general.
Specific in this context means that Intel is fined heavily to make sure they are sufficiently punished to not consider the act again (or preempt them from doing the conduct in the first place).

General deterrence means that the fine is heavy enough to make others (for example, Motorola) from engaging in similar conduct.


We are left with the question of what constitutes and appropriate level of punishment. We need to ensure that the costs outweigh the benefits or the party will abrogate the rule and willingly pay the fine when caught.

What of death or million dollar punishments for more trivial behaviors, such as, speeding?
The problem with either of those punishments, according to utilitarian theory, is that they risk undermining the legitimacy of the social control system. Remember that these theorists were not only legal scholars, they were theorizing about government and society as a whole. The law is a function of the modern state. When punishments are excessive, the state becomes tyrannical.

Aside from violating the senses of the thinking human, tyrannical behavior not only risks being overthrown but demands it from the citizenry according to this paradigm.
 
vengence said:
Except that x86 doesn't cover 64 bit processors x86-64 does which AMD owns.

I'm not sure if I can even take you serious anymore.
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*yawn*

So they're just gonna use an extension of x86 without the proper license, huh? You require both to produce a x86-64 chip.
 
Nemesis999 said:
*yawn*

So they're just gonna use an extension of x86 without the proper license, huh? You require both to produce a x86-64 chip.
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Which means they are in a M.A.D. situation. Which means the smaller company has leverage and can not simply be "bullied" around and anti-trust would never allow Intel to buy AMD.
 
if I was intel and the EU was suing me for this I'd say "ok no more intel in EU, goodbye"
 
vengence said:
Which means they are in a M.A.D. situation. Which means the smaller company has leverage and can not simply be "bullied" around and anti-trust would never allow Intel to buy AMD.
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Of course they can. If AMD were to go bankrupt Intel could easily buy x86-64. If AMD remains marginalized then Intel still holds the monopoly position. AMD has no power here, their only threat results in their own death almost immediately, and Intel simply buying x86-64. No regulator in the world is going to tell Intel that they can't buy a piece of property that is essential to the continuation of their business.
 
Imaulle said:
if I was intel and the EU was suing me for this I'd say "ok no more intel in EU, goodbye"
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And AMD would say "Oh hey look, a multi-billion dollar market for free" and get nice and fat while intel lost billions in profits.
 
Dr_b_ said:
There isn't a company on earth right now that can afford to pay up such a fine, and a fine that large is a hefty part of a new fab.
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Intel is very able to pay the fine. Their annual net income is almost 4 times the suspected fine, and their current assets amount to $19 billion.
 
"The EU added more charges in 2008, alleging Intel paid a major retailer to keep computers that use AMD chips off its shelves"

Thats the only part that shocks me
 
Rockjay420 said:
"The EU added more charges in 2008, alleging Intel paid a major retailer to keep computers that use AMD chips off its shelves"

Thats the only part that shocks me
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Yeah that's the ONLY thing about Intel I detest. Their shady way of making subtle threats to OEM if they tried to sell products and flagships with AMD processors.

Otherwise, competition is healthy for the economy. You can't have the US and EU government babysit AMD while they're laying back and enjoying their protection while Intel makes agressive products. The results are what we see today: The Phenom and Phenom II lines.

EU needs to back off and let Intel and AMD butt heads. If AMD wishes to survive and remain near the top, they need to work harder and stop hiring people like Hector Ruiz to run their company.
 
Nemesis999 said:
Of course they can. If AMD were to go bankrupt Intel could easily buy x86-64. If AMD remains marginalized then Intel still holds the monopoly position. AMD has no power here, their only threat results in their own death almost immediately, and Intel simply buying x86-64. No regulator in the world is going to tell Intel that they can't buy a piece of property that is essential to the continuation of their business.
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Bankrupt AMD does not end the M.A.D. senario. AMD simply sells the x86-64 to a third party in a last attempt for cash. The buyer does NOT have to be intel. Any sizeable patent troll would be happy to pick it up and take the royalties.
 
vengence said:
Bankrupt AMD does not end the M.A.D. senario. AMD simply sells the x86-64 to a third party in a last attempt for cash. The buyer does NOT have to be intel. Any sizeable patent troll would be happy to pick it up and take the royalties.
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Intel almost certainly covered themselves with respect to this in their 2001 cross-licensing agreement.

There is a specific section which deals with transference of rights. Unfortunately most of the interesting details are censored because of confidentiality issues, but you can bet this section specifically deals with the legality of what you've mentioned.
 
Nemesis999 said:
And AMD would say "Oh hey look, a multi-billion dollar market for free" and get nice and fat while intel lost billions in profits.
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Without the licensing AMD would be screwed, so EU would have no processor market, imagine their premiums then

Secondly, AMD would run a monopoly in the EU, which is a huge EU no no, which would most likely lead to some sort of split or some injection of another processor company, so AMD would be back on the competitor list.

Rockjay420 said:
"The EU added more charges in 2008, alleging Intel paid a major retailer to keep computers that use AMD chips off its shelves"

Thats the only part that shocks me
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That doesn't shock me. You should see how many companies does this, they pretty much all do. It's the 800lb gorilla tactic.
 
Ockie said:
Without the licensing AMD would be screwed, so EU would have no processor market, imagine their premiums then
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The license agreement can only be terminated if there is a breach of contract. Intel making the personal decision to leave the European market does not constitute breach of contract.
 
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