Intel slammed with record $1.45 billion antitrust fine

By on May 13, 2009, 9:16 AM
The European Commission's lengthy investigation has resulted in a record fine for Intel who must pay €1.06 billion ($1.45 billion), after being found guilty of violating antitrust laws in Europe. According to the Commission, between 2002 and 2007 the chip maker paid manufacturers and a retailer to favor its products over rival AMD's. The fine dwarfs Microsoft’s, who was ordered to pay €427 million ($663 million) back in 2004 for abusing its market dominance.

Intel’s greatest adversary brought the case to the EU’s attention back in 2000, with additional complaints filed in 2003 and 2006. The Commission believes that Intel had dispensed hidden rebates to Acer, Dell, HP, Lenovo and NEC if they agreed to only use Intel chips. Furthermore, Media Saturn, who owns Europe’s largest consumer electronics retailer Media Markt, had been paid to exclusively sell computers with Intel processors.

In a statement, Competition Commissioner Neelie Kroes affirmed that “Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years.” In an unsurprising response to the ruling, CEO Paul Otellini stated that “Intel takes a strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace.” He went on to deny that any harm had been caused to consumers, and that Intel would appeal the decision.

User Comments: 22

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burty117 said:
HA HA HA!!! take that Intel! at last! AMD might see the light of day again! Well that does serve Intel right as I have worked with both Intel and AMD machines and when it comes to a decent processor for a good price AMD always outperformed an Intel and since company's are trying to make the best product, I was always wondering why they always use Intel? it sbecause they paid them to! Sorry, Rant over now, and they have now got a fine so I can get on with life, just to note i'm not an AMD fan boy, I own a core i7 system which is good but i have built a computer with the latest Phenom 2 and they are really good!
DarkCobra said:
Well now that the AMD commercial is over . . . Frankly, I'm getting really sick of the European Consortium and their constant law suits whining about how Microsoft or Intel or whoever is making their lives so miserable. It seems like not a week goes by where they are suing an American based company for unfair this or unfair that.I'd like to see all these companies simply pull their products from the Euro region altogether so we can next watch them whine about how they're now being EXCLUDED from all these same products!
kingdingdong said:
lol. yea i worked at dell when we stopped selling amd over the phone cause intel paid us. you can get amd on the website but its hard to find. hahaah finally intel got cought.
phantasm66 said:
Microsoft, now Intel. Who's next?Google.
polidiotic said:
Innocent until proven guilty. I'm sick of all of these lawsuits, too, and agree with DarkCobra.
Eddie_42 said:
Microsoft was an issue of abuse of power, they had such a dominant stake and they abused that, the fine is in perfect accordance with regulations for the markets. Intel was found paying companies to not sell a competitors product. A clear case of violating anti-trust policies (even in the US). Both of them tried to sleaze their way to more money, and they both got caught. This is what rules a regulations are for. DarkCobra, Poldidiotic, Phantasm, I'm sure you be at the courthouse too if your company was being pushed out of the market by unfair practices of a competitor.
gobbybobby said:
Intel Suck, AMD All the way.
JDoors said:
Frankly, I pretty much dismiss any EU suit as simply another tax large foreign companies must pay to do business there. Regardless of any actual harm to consumers or proof of wrong-doing, you WILL cough up large amounts of dough to do business in the EU as they regularly use anti-monopoly statutes to extort money from large foreign companies -- Which is certainly ironic as many EU companies regularly flout those very laws.
tengeta said:
The EU is extortion anyways, almost all the countries ave 50% tax rates now.Why would they treat foreign businesses the same if they know they will suck up and pay? I agree with DarkCobra, they should yank products out in protest and then see how much they lose when The European people buy the products from foreign markets tax free... LOL. Then again, I have no idea how internet sales work there.
polidiotic said:
[b]Originally posted by Eddie_42:[/b][quote]DarkCobra, Poldidiotic, Phantasm, I'm sure you be at the courthouse too if your company was being pushed out of the market by unfair practices of a competitor.[/quote]1st, have you seen the amount of bunk lawsuits being thrown around over the last few years? Lawyers are making bank off these frivolous lawsuits, concerning trademark/copyright/patent infringement, etc. Not to mention the amount of deadbeats who patent something, but never develop and just sit on it, until someone actually does - where they pounce on the "infringing" company. It's absurd.I know this isn't the law in question, but c'mon... I've seen AMD cpus being used by various large PC manufacturers/distributors online and off. Granted, Intel is the gaming processor of choice by most companies, but that's because they consistently outperform AMD. When AMD was actually competing with Intel's high-end CPUs during the late 90s/early 2000s (00-03), it was up in the air who would carry what.I think this is a move based on jealousy and a "feeling" of being unjustly treated, but time shall tell. I'm not saying they weren't doing it, but at least give them their day in court to defend themselves. The big guys are always the easiest target.
polidiotic said:
Also, good points by JDoors.
Burty117 said:
polidiotic! your wrong! you've seen big manufacturers using AMD on 1 or 2 laptops! the next 50 are all Intel based and you talk about performance and have not stopped and looked at the fact that the cheap intels are no where near as good a performer as an AMD! but intel own that market as well? you can't really stand up for a company that has broken the law to get to the position there in? apple got the ipod and iphone in the top positions by making good products and advertising, intel did it bt cheating, I feel they should be pay more for what they have done.
Relic said:
Why some of you are defending Intel on this is beyond me. While I am an Intel customer and enjoy there processors, what they did was WRONG and illegal. If they want to do business in Europe they have to follow the law, forcing out your competition with these sleazy tactics so you can have a monopoly is ridiculous. We need MORE competition (in everything imo) to bring down prices for all consumers in the US, EU, etc.
burty117 said:
Thank Relic! I am too an Intel customer! But i stand up for AMD since Intel was totally wrong! Why are people here standing up for Intel?
trinitibt said:
Obviously there was a strong demand for AMD processors or else Intel wouldn't have needed to pay firms to not sell them. The unfortunate part is that AMD was hurt far deeper than people think because most people don't really understand business. That STOLEN revenue hurt AMD stock, profitability and and the entire company as a whole. In most cases, the negative ramifications are still most likely ongoing. That also contributed to AMD not having the financial means to further R&D more competitive products. The list goes on and on on why this can not be allowed in business. That was dirty to the tenth power by Intel and they deserve everything they get. Make a better product and let the consumers decide. They blatantly stole away our right to choose as consumers and forced us to buy their products. How could any of you be cool with any of this, fanboy or not? That pushed me more to AMD because of this unethical and dishonest stunt.But the billion dollar question here is, who gets the money that was fined? AMD should get it all.
labrat611 said:
who is getting this money????
mut80r said:
[b]Originally posted by trinitibt:[/b][quote]But the billion dollar question here is, who gets the money that was fined? AMD should get it all.[/quote][b]Originally posted by labrat611:[/b][quote]who is getting this money????[/quote]If you read the sources in the article;"Intel will pay its fine and carefully inspect its sales relationships to protect against risky influence. AMD does not receive any money from the fine, which accrues to the EU tax budget. And Intel's greatest challenge will remain market growth, not market share."
avoidz said:
[b]Originally posted by Relic:[/b][quote]Why some of you are defending Intel on this is beyond me. While I am an Intel customer and enjoy there processors, what they did was WRONG and illegal. If they want to do business in Europe they have to follow the law, forcing out your competition with these sleazy tactics so you can have a monopoly is ridiculous. We need MORE competition (in everything imo) to bring down prices for all consumers in the US, EU, etc. [/quote]Well put. +1 for this, too.
XantorAmnobius said:
Here is my view...In February 1982, AMD signed a contract with Intel, becoming a licensed second-source manufacturer of 8086 and 8088 processors. IBM wanted to use the Intel 8088 in its IBM PC, but IBM's policy at the time was to require at least two sources for its chips. AMD later produced the Am286 under the same arrangement, but Intel canceled the agreement in 1986 and refused to convey technical details of the i386 part. AMD challenged Intel's decision to cancel the agreement and won in arbitration, but Intel disputed this decision. A long legal dispute followed, ending in 1994 when the Supreme Court of California sided with AMD. Subsequent legal disputes centered on whether AMD had legal rights to use derivatives of Intel's microcode. In the face of uncertainty, AMD was forced to develop "clean room" versions of Intel code.In 1991, AMD released the Am386, its clone of the Intel 386 processor. It took less than a year for the company to sell a million units. Later, the Am486 was used by a number of large original equipment manufacturers, including Compaq, and proved popular. Another Am486-based product, the Am5x86, continued AMD's success as a low-price alternative. However, as product cycles shortened in the PC industry, the process of reverse engineering Intel's products became an ever less viable strategy for AMD.If I understand correctly AMD stole from Intel first by reverse engineering their technology. Also according to me the "underdog" AMD always tried undercutting Intel with prices. Fine, maybe what they did wasn't "fair". At least I personally have worked with Intel and AMD as an IT specialist and my point of view is that Intel delivers far better quality, stability and reliable CPU's than AMD could ever hope to produce. I've seen to many AMD CPU's malfunctioning.My point of view - like it or hate it, it's your choice.To Intel - Good for you, kicking AMD in the nads and taking revenge for what they did...
Night Hacker said:
First you state that the supreme court sided with AMD... then you state that AMD stole from Intel... which is it? Seems to me the court disagrees with you.I don't believe you're in IT at all. I have used the same AMD processor for about 8 years now, the entire time I ran it overclocked (a 1700+ running at 2600+ speeds) without ANY problems. The 2600+ runs at around 1780MHz, but it is labeled a 2600+ because at 1780Mhz, it runs as fast as an Intel at 2600. This is a superior CPU. To the person stating that from 00-03 it was "up in the air", bull... I remember, AMD was far ahead of Intel, it was a better CPU. I always wondered why computer manufacturers chose Intel over a clearly better CPU like AMD, and now it is crystal clear.It's obvious to me that Intel was losing out to superior AMD processors so they reverted to using unfair business practices in order to gain more sales over AMD. When the public sees all these brand name computers running Intel only, they start to believe they must be the better CPU, after all, why else would everyone be using Intel... why else indeed...As a consumer, the last thing we need is one CPU manufacturer dominating the market. We already have that with an operating system.
XantorAmnobius said:
And you just proved that you are definetly spouting rubbish...First I live in a country where the temp reaches about 102 F - I dare you to stop your fan and see if your CPU holds - Intel cuts out. Secondly - I've owned an AMD - a 1200mHz. It lasted 6 months under the pressure I threw at it. I've known alot of people that owned A M D - they are all sworn to Intel now - only thanks to AMD's own shortcomings.And last - If you follow the history of AMD... They were not even in the CPU market - Intel was. They wanted a piece of the pie - Intel helped them out. They underpriced their CPU's to outsell Intel - Intel said stuff you. They took Intel to court - like the whining babies they are. The court ruled in favour to AMD - Oh, AMD is in heaven... They now have permission to reverse engineer all Intel's CPU's. Fair? In terms you're likely to understand - If I invented something, let's say an self sustaining car requiring 0% fossil fuel... And you decide to come into the same market, get a court to rule that you may reverse engineer MY hard work, TAKE MY WORK and then making lesser versions and selling it cheaper. Isn't that stealing in a legally sound way - or is it ok if court said it is "ok". So if a murderer commited a murder - it is ok - if the court rules it "ok".AMD's I personally had prolems with:AMD K6 seriesAMD 850 DuronAMD 1200 AnthlonAMD 2000 XPSince then I had it with AMD - I can whip my own @#$ for ever trusting AMD after the K6 series...You're obviously new in the IT field.
uber1337h4xx0r said:
So predictable... Everytime two rival companies are mentioned, there will be people complaining about which is better. Guess what everyone? I've had AMDs and Intels ever since I had a 386 SX... And guess what? All of them worked great! So... AMD is great. Intel is great. Leave it at that. None of them is "better" because everytime one of them makes "the best processor", the competitor makes another one that bests it.Same with Nvidia/ATI. And in regards to the Wii/Xbox/PS3 wars... Here's all it amounts to: Wii: best in controls and minigames; Xbox: best in terms of community/online play; PS3: best in graphicsSo that pretty much covers it all. Oh wait, there's also the Zune vs Ipod Touch war. Well.... as much as I don't like Apple (mainly because of the arrogance apple owners have, as well as the ridiculous prices), I have to admit the touch seems to excel in all aspects except maybe battery life and storage space. I think the only legitimate war we can have is one of operating systems. Though it basically boils down to most stable (linux I think) vs most compatibility (Windows) vs most flashy looking (Mac OS X). Still, would be interesting to see all the different views. I'll just have to wait on Microsoft to be sued by Apple to see what you guys have to say about Windows vs Mac.
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