Intel fined for foul-play in Europe, must shell out $1.4 billion

Intel has been ordered to pay a fine of $1.4 billion, after the General Court of the European Union upheld the European Commission's report of suspected foul play by the company.

AMD filed a formal complaint back in 2000, alleging Intel of giving various benefits to PC makers such as HP, Dell, Lenovo and Acer for supplying Intel chips as the only option on their computers. The European Commission had submitted a report on Intel's abuse of its dominant position and demanded the heavy fine back in 2009. Intel's appeal against the fine has now been rejected as the General Court of the European Union in Luxembourg has upheld the commission's report.

The commission found Intel guilty of engaging in the following activities:

(1) granting rebates to 4 PC and server manufacturers (Dell, HP, NEC, Lenovo) conditional on them obtaining all or almost all of their supplies from Intel, and payments to one downstream computer retailer (Media Markt) conditional on it only selling PCs with Intel CPUs ("conditional rebates"); and

(2) granting direct payments to 3 computer manufacturers (HP, Acer and Lenovo) to halt, delay or limit the launch of specific products incorporating chips from Intel’s only rival, AMD (so-called “naked restrictions”).

Although, various terms of these deals were not documented by the parties, the General Court of the European Union has upheld the commission's report and ordered Intel to pay the previously determined fine of 1.06 billion Euros (US $1.4 billion), which is 4.15 percent of Intel's revenues in 2008.

Source: EU Court via Reuters | Image via Clubic

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This is a completely misleading article and is old news. This is a notice of an appeal decision, not a new fine or finding. Intel paid the whole fine in 2009 and has not been cited by the EU or anyone else since then for anticompetitive business practices.

The EU are just bunch of extortionist looking for a pot of money deliberately going after the companies that have done well in the arena of business. Every other day you hear of a fine being waged by the EU against some corporation. When does it stop?

The US fined GSK $3bn: http://www.telegraph.co.uk/fin...or-mis-promoting-drugs.html
The US fined BP $4.5bn: http://www.dailymail.co.uk/new...ater-Horizon-oil-spill.html
The US fined HSBC $1.9bn: http://uk.reuters.com/article/...probe-idUKBRE8BA05K20121211
The US is preparing to fine BNP Paribas $10bn: http://www.bbc.co.uk/news/business-27676000

The reality is that if companies break the law they should be expected to face the consequences. Cases have to judged on their own merit and in this case there is no doubt that Intel deserves a substantial fine.

Jackroosky said,
The EU are just bunch of extortionist looking for a pot of money deliberately going after the companies that have done well in the arena of business. Every other day you hear of a fine being waged by the EU against some corporation. When does it stop?
I agree in general (the Microsoft browser ballet, anyone?), but this is a justified judgement.

I love Intel's chips, but this was downright anti-competitive simply because they had deep enough pockets rather than the better technology (though this was around the time that the Core Duo was launching, which was the most recent stomping of AMD).

The thing that bothers me is that I expect that the fine is going into the EU's pockets rather than the one truly affected by the trouble: AMD.

I'm not sure about the second one, but the first item seems completely legal to me. I'm very sure Airbus has a special program to reward those airlines that only have Airbus planes (so do Boeing), and it is deemed legal by the same courts.

....thats not the only thing intel did, for one thing airbus is not a monopoly in the first place. second of all these oems were not given a choice, if you did not join the program then intel would say "ok well then i cant guarantee that you will receive the inventory that you want/need...oh you still don't want to join, well how about i just give more money and product to your competitors and help them beat you!!! there you go."

basically intel used Mob like tactics.....al Capone style.

Why do such huge companies continuously only get what amounts to a slap on the wrist when they get busted?

Any Joe Blow ever got busted for anything similar and it would've been at least that much with interest compounded from the day they first went to court, plus other miscellaneous costs! The EU is about as stupid as Americas judicial system!

So they can't give reward for exclusive deals? I bet Airbus is allowed to get away with giving massive discounts to Airbus only fleets.

....thats not the only thing intel did, for one thing airbus is not a monopoly in the first place. second of all these oems were not given a choice, if you did not join the program then intel would say "ok well then i cant guarantee that you will receive the inventory that you want/need...oh you still don't want to join, well how about i just give more money and product to your competitors and help them beat you!!! there you go."

basically intel used Mob like tactics.....al Capone style.

Who will get the money from this fine?

I really hope it is not the EU, as we all know very well the EU is not corrupt, does not do doggy deals, etc... no sir-ey , they just don't do that!

/S

Money should go to AMD or at least a charity... IMAO

It's a shame that it took this long, as the evidence against Intel was overwhelming. Intel engaged in anticompetitive business practices that directly hurt the business of AMD, which at the time had the better product at the better price.

I'm glad that the EU is tough on the abusive business practices employed by companies like Intel but it needs to act a lot more swiftly to prevent lasting damage to competitiveness within the marketplace.

coth said,
Bad engineering and outdated technologies that hurt AMD, not Intel.

It can also be argued that the reason for AMD's lagging technology was due to the unfair business practices of Intel, resulting in a lower amount of capital AMD had to invest in research and development.

AMD had terrible CPU architecture in the early days during Windows XP. It wasn't until AMD 64 that they had to make a come up. And I was practically a preteen when this was happening. And I used to be an AMD/Nvidia fan when I was a kid.

coth said,
Bad engineering and outdated technologies that hurt AMD, not Intel.
AMD made mistakes and continues to do so but there is no dispute that Intel engaged in anticompetitive business practices that directly hurt AMD's business and hurt consumers.

Mr.XXIV said,
AMD had terrible CPU architecture in the early days during Windows XP. It wasn't until AMD 64 that they had to make a come up. And I was practically a preteen when this was happening. And I used to be an AMD/Nvidia fan when I was a kid.

That is simply not true, AMD cpu's were destroying Pentium's long before Athlon64 came out. Athlon's and Athlon XP's were faster clock for clock than Pentiums and they were also cheaper and typically better overclockers. From the inception of AMD's Athlon CPU's they were faster at the same clock speed and cheaper than Intel CPU's until Intel released Conroe, its been since then AMD has not been able to regain the performance crown.

Really? I had a certain Pentium which was on an IBM, had 3Ghz standard, this was when I was 14/15. It many Intel and AMD computers that were a few years ahead, especially when the 2007 Intel iMacs came out and when there were AMD Semprons.

Intel always lead when it came to clock speed but in real world performance AMD chips clocked much lower equaled or bettered Intel. Intel Netburst architecture was very inefficient, it allowed for high clock speeds which were good for marketing but they consumed too much power, generated too much heat and were out performed by Athlon architecture that was clocked and priced much lower

coth said,
Bad engineering and outdated technologies that hurt AMD, not Intel.

Havent you thóught for a moment that it might be just because of the same shady practices done by Intel? First the compilers which crippled AMD based CPUs, then the same paying off OEMs? AMD just cant afford their own fab anymore. Thankfully GloFo and Samsung started setting up 14 FinFet and AMD can use that once it's done. I wouldnt say bad engenering either, Bulldozer was done half-automated, that was the problem. Now Jim Keller (the original K10 arch) is back in AMD and said that a new high-performance chip will be out in 2 years. Who knows on what node but if he has to do with it AMD could do a serious catch up wih Intel.

alwaysonacoffebreak said,

Havent you thóught for a moment that it might be just because of the same shady practices done by Intel? First the compilers which crippled AMD based CPUs, then the same paying off OEMs?

+1

Typical PC users/builders don't know anything about CPU biased dispatching...Intel is shady as heck and always have been, and to our (consumer end user) detriment.

coth said,
Bad engineering and outdated technologies that hurt AMD, not Intel.

At a time when AMD's processors not only outclassed intel's performance-wise, and also more affordable, they still got vastly outsold by intel, because intel was blatantly bribing/threatening OEM's to not use AMD hardware. You really think the reason OEM's like dell didn't use AMD processors (especially at a time when they were faster/cheaper), was becuase of what? poor marketing? No, its because intel was busy lining dell's pockets, as long as dell didn't use AMD hardware: http://www.xbitlabs.com/news/c...illion_for_Exclusivity.html

That's just one of the example's of intel's monopoly abuse, Intel has done everything in their power to ensure that they remain a monopoly over the years. AMD was irreparably damaged by these practices. AMD has obviously made plenty of their own mistakes, but make no mistake, intel played a huge part in this.

If not for these mob-style tactics employed by intel during this period, AMD could have had a lot more money to pump into R&D.

Edited by ViperAFK, Jun 16 2014, 10:06am :

The funny thing is, even tho AMD doesnt have some huge sums to pump into R&D they can still keep up with Intel on some fronts. Not to mention the iGPUs which just outclass Intel's in the same price range.

Guess Intel should be happy the fine wasn't based on 4.15% of their revenue from last year. I had to do a double take when I saw the dates mentioned in the article! Some of you really young grasshoppers were still crawling around in diapers back then. hehe

ir0nw0lf said,
Guess Intel should be happy the fine wasn't based on 4.15% of their revenue from last year. I had to do a double take when I saw the dates mentioned in the article! Some of you really young grasshoppers were still crawling around in diapers back then. hehe

However, 4.15 of revenue is still a lot of money considering that the profit usually is 10-20% of the revenue.

Mulloy also noted that the company retains the option to appeal the decision to the EU's highest court, the European Court of Justice, within seventy days of the present ruling. He further explained that the computer chip giant paid the fine in full back in 2009, claiming that, as a result, “there is no material financial impact on our business due to today's ruling.”
Source: arstechnica.com

SharpGreen said,

For what?

Microsoft does the same thing with OEM's as well. It gives them discounts under the proviso that they don't offer PC's without an OS or with Linux. It also pays them to plaster the message "CompanyX Recommends Windows X" across their websites. That's why it's all but impossible to buy an OEM PC from a major manufacturer that doesn't come with Windows preinstalled. Things are slightly better now with ChromeOS, but still it would be nice if OEM's provided an option so users can pick a preferred OS or none at all. And by doing so save money by not paying the Microsoft tax.

Before you ask for evidence:
http://www.zdnet.com/microsoft...erating-systems-3039261437/

Microsoft and other companies have been abusing the markets for years. None of these antitrust judgements have an effect. The US is even worse because there's rarely even an investigation.

Edited by simplezz, Jun 13 2014, 12:38pm :

simplezz said,

Microsoft does the same thing with OEM's as well. It gives them discounts under the proviso that they don't offer PC's without an OS or with Linux. It also pays them to plaster the message "CompanyX Recommends Windows X" across their websites. That's why it's all but impossible to buy an OEM PC from a major manufacturer that doesn't come with Windows preinstalled. Things are slightly better now with ChromeOS, but still it would be nice if OEM's provided an option so users can pick a preferred OS or none at all. And by doing so save money by not paying the Microsoft tax.

Before you ask for evidence:
http://www.zdnet.com/microsoft...erating-systems-3039261437/

Microsoft and other companies have been abusing the markets for years. None of these antitrust judgements have an effect. The US is even worse because there's rarely even an investigation.

The number people who care about being able to buy a Linux machine, is so small as to be completely irrelevant.

smooth_criminal1990 said,
In my eyes, playing "nice" doesn't make up for the years of flouted standards, vendor lock-ins, painful licensing, and random shortcomings of their products.

They have never played nice. Extortion tactics and patent abuse being the most overt behaviour as of late. Pressurising PC OEM's into using Windows only is another.

SharpGreen said,

The number people who care about being able to buy a Linux machine, is so small as to be completely irrelevant.

What about people who already bought Windows. Why should they have to pay the Microsoft tax twice or more? OEM's should be forced to offer a 'no OS' option. Currently Microsoft compels them not to. We need regulation to stop that kind of behaviour.

simplezz said,

What about people who already bought Windows. Why should they have to pay the Microsoft tax twice or more? OEM's should be forced to offer a 'no OS' option. Currently Microsoft compels them not to. We need regulation to stop that kind of behaviour.

The number of people who would buy an OS-free computer, while not nearly as small as the Linux number, is still pretty small and almost as irrelevant.

simplezz said,

Pressurising PC OEM's into using Windows only is another.

Chromebooks say hello. Microsoft must not be pressuring OEMs that hard. Plenty of OEMs make PC with operating systems other than Windows. It's always a commercial failure. The pressure to sell Windows PCs comes from the market.

You're still stuck in the 90's.

SharpGreen said,

The number people who care about being able to buy a Linux machine, is so small as to be completely irrelevant.

Part of the reason Windows ended up with such a huge marketshare in the first place, is because of these types of shady business practices that have been going on for years and years though...

Martin Sundhaug said,
Why does Intel continue to think they can get away with this?

Probably because it worked out well for them. This was something that happened in 2000, now 14 years later they have to pay for it. 14 years of unfair advantage against AMD is probably worth a LOT more to intel than the loss of this money.

Martin Sundhaug said,
Why does Intel continue to think they can get away with this?

Get away with what? A smart business idea for both intel and the OEMs?

Scabrat said,

Get away with what? A smart business idea for both intel and the OEMs?

You cant seriously be this...fill in the blank yourself. This started when AMD had better performance than Intel did, Intel just had more money and paid off everybody. It was reported somewhere that Dell got 6 BILLION from Intel for this. And guess what, Dell still doesnt use AMD hardware.

n_K said,

Probably because it worked out well for them. This was something that happened in 2000, now 14 years later they have to pay for it. 14 years of unfair advantage against AMD is probably worth a LOT more to intel than the loss of this money.

Yep, AMD got royally screwed, no matter how much intel gets fined now (not to mention, this is chump change for intel, and I don't think AMD even gets a penny).