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European court backs €1.06 fine against Intel

  • Europe's second-highest court has upheld a €1.06B ($1.44B) fine levied in 2009 on Intel (INTC) by the EU's antitrust regulators.
  • Intel was accused five years ago of blocking AMD's (AMD) market share by giving rebates to PC makers. The result led them to buy most of their computer chips from Intel.
  • The company can still appeal the case to Europe’s highest court, the European Court of Justice.
Comments (27)
  • Andreas Hopf
    , contributor
    Comments (7809) | Send Message
     
    €1,06… that's an entire BK cheeseburger ; )

     

    Too bad the proceeds don't end up in AMD's coffers, where they rightfully belong.

     

    Nevertheless, the ruling won't stop the majority of AMD's processors ending up in craptops, and it won't start MSFT or SNE featuring "AMD inside" on their consoles either. But it's a wee prop-up for sentiment.
    12 Jun, 05:01 AM Reply Like
  • King Rat
    , contributor
    Comments (557) | Send Message
     
    I currently have 2 computers with an AMD GPU and Intel CPU. I would love an AMD CPU but don't have one. Why? Is it because of rebates? No. Why then?

     

    Because Intel has cleaned AMD's clock to the core each cycle for the past 8 years. 3 puns in one sentence, not bad.

     

    Did the EU regulators consider that AMD CPUs have run at half the speed while producing twice the heat of Intel CPUs? Did the EU regulators consider that the largest market of CPU chips at time of trial, "mobile" (laptop) chips, are the most heat-sensitive and that that played to Intel's strengths?

     

    I love AMD and I like the progress they've made with Kaveri, but the CPU side of that "APU" is just a thorn in their side. They really need a replacement for Bulldozer.
    12 Jun, 05:07 AM Reply Like
  • linuxlowdown
    , contributor
    Comments (70) | Send Message
     
    Well, if AMD rightly had the sales and profits in the first place, then AMD would have had more money to spend on R&D to design you better chips. Think about it.
    12 Jun, 05:48 AM Reply Like
  • Ashari
    , contributor
    Comments (191) | Send Message
     
    the case refers to a time when AMD was the performance king and Intel's CPUs where slow and overheating (Athlon vs Pentuim 4) and Intel resorted to illigal means to defend its market share, n.b. even including the EU fine and the $1.25 billion settlement with AMD, that's probably still less then AMD has lost due to Intel's illegal market abuse practices.
    12 Jun, 06:02 AM Reply Like
  • Minkoff
    , contributor
    Comments (13) | Send Message
     
    It's the anti competitive practices that are important here, not the performance of various chips. Practices that are somewhat continuing today with the "contra revenue".
    As to the "AMD CPUs have run at half the speed while producing twice the heat of Intel CPUs"...does this mean that if AMD chips are running at the same speed will produce four times the heat? Where do you get those numbers from?
    AMD cpu's generally have lower temperature than Intel, especially when measured correctly. You are free to Google, as there is a lot of information about CPU temps.
    http://bit.ly/1kQwCb3
    Do not confuse AMD TDP with Intel TDP.
    12 Jun, 06:28 AM Reply Like
  • trader_xx
    , contributor
    Comments (802) | Send Message
     
    You can be sure of one thing, the cabal of INTC management that invented "contra revenue" must have had a frightful time of framing it just the right way...

     

    Funny how a little EU lawsuit has forced INTC to tap dance on a land mine with this CR warthog as a partner....
    12 Jun, 08:19 AM Reply Like
  • Bruce24
    , contributor
    Comments (62) | Send Message
     
    ---> "Practices that are somewhat continuing today with the "contra revenue"."

     

    The rebates themselves were not the problem, it was the conditions Intel put on the rebates that was. Such as limiting the amount of AMD product an OEM could sell to get the rebate. AMD has also, and probably still, provides rebates on some of it's products. Intel certainly now knows the rules for rebates and has agencies from many governments looking over their shoulder.
    12 Jun, 09:39 AM Reply Like
  • Bruce24
    , contributor
    Comments (62) | Send Message
     
    The fine was for what happened between 2002 and 2007. While at the very end of that period Intel has released the original Core based processors, which put regained the performance lead from AMD, for a good many of those years AMD had the Original Hammer based Opteron and Althlon64 kicking the P4 in the butt.
    12 Jun, 09:43 AM Reply Like
  • Minkoff
    , contributor
    Comments (13) | Send Message
     
    @trader_xx - I agree.
    @Bruce24 - I agree with you too and as trader_xx pointed, framing it the right way... is what matters.
    Rebates are now a standard tool and a very complicated matter to assess.
    I do, somewhat, understand new or small companies using this strategy when trying to enter a market, but I'm not convinced for the the big old dogs...
    I'm sure, that Intel does not directly limit the amount of chips that a company can purchase from Qualcomm, AMD etc. The market will do that. All Intel has to do is subsidize OEMs, bring BoM down and flood the market.
    12 Jun, 10:32 AM Reply Like
  • Stock Market Mike
    , contributor
    Comments (1840) | Send Message
     
    "I'm sure, that Intel does not directly limit the amount of chips that a company can purchase from Qualcomm, AMD etc. The market will do that. All Intel has to do is subsidize OEMs, bring BoM down and flood the market."

     

    Now they don't directly limit it. Back then the kickbacks were structured more like...

     

    "9/10 systems sold must be Intel to qualify." - That's at a time when AMD was rapidly approaching 40% market share, and had superior products for several years beyond. It's quite feasible that without the kickbacks, AMD would've emerged as a true equal or superior to Intel. AMD might be like nVidia is to ATI/AMD today. (Top dog) It's scary how much some shrewd/illegal moves can shift the future.

     

    The big problem was, a lot of OEMs decided to JUST sell Intel systems, since it's hardly worth designing separate models for such meagre non-subsidized volume... especially when all your competitors are onboard and getting the kickbacks.

     

    AMD seems to be back to innovation, now. I sense that we're entering another kick-butt generation, once software catches up to their recent hardware advances.

     

    -Mike
    12 Jun, 11:33 AM Reply Like
  • Minkoff
    , contributor
    Comments (13) | Send Message
     
    @Stock Market Mike
    You're correct! My mistake, as I should have pointed that I'm talking about the current contra revenue strategy, which to me is absolutely the same, as to what Intel was doing back then. The outcome is the same.
    Unfortunately, this rebate strategy has been widely adopted.

     

    As to the last sentence...you, I, and a handful of other people (as to the majority) are looking at innovations and most importantly understand the economical importance.
    Professional consumers...follow company rules, which are always influenced by high level executives.
    Regular consumers...well, they just buy what has been suggested to them. I don't need to tell you, how resellers think...when they sell hardware.
    I can only hope that you are right.

     

    BTW, I'm additionally counting on the semi-custom business. There are a lot of opportunities, as it's not easy or worth to assemble and sustain a CPU/GPU design team.
    12 Jun, 12:14 PM Reply Like
  • Realtor_k
    , contributor
    Comments (67) | Send Message
     
    @Minkoff:

     

    Is it anti-competitive to offer rebates or coupons to attract price-sensitive buyers to your product or to your store?

     

    I'm not familiar with EU product-pricing policies -- so it may be different how retail operates in Europe: No discounts? No rebates?
    12 Jun, 01:37 PM Reply Like
  • Minkoff
    , contributor
    Comments (13) | Send Message
     
    @Realtor_k
    If there is no legal limit to a rebate, where and who draws a line between stimulating a market and being anti competitive?

     

    You have two products in the same price bracket and the expenses for one of them is shared between you and the chip supplier:
    - Which one will bring you more profit or less R&D investment and which one will you try to sell more?
    - Would you care about performance, especially if the all of your competitors are on board?

     

    It's a very dangerous, and as I said, very hard to assess matter. Since, in the long run, it may have serious consequences EU is trying to look at those possibilities. Not that we have no rebates, but unfortunately "the rebate strategy has been widely adopted"
    12 Jun, 02:25 PM Reply Like
  • Bruce24
    , contributor
    Comments (62) | Send Message
     
    >>> If there is no legal limit to a rebate, where and who draws a line between stimulating a market and being anti competitive?

     

    Giving rebates was not the problem, it was the conditions put on the rebates allowing them to kick in that was the problem. I included examples from the EU in a previous post.

     

    For a more simple good/bad examples:

     

    Intel offering OEMs buying 1M or more chips a 10% rebate is fine.
    Intel offering OEMs who buys 90% of it's chips from Intel is not.

     

    As far as rebates go, there are plenty of rules/laws around how they can be used. I personally don't like rebates and a consumer or investor. I would rather simply have the company lower it's price. As an investor I think they can mislead you on a companies revenue and profits depending what rebates they give or receive. For example, the SEC found the way Dell reported the rebate money it got from Intel mislead it's investors.
    12 Jun, 03:05 PM Reply Like
  • Roger 36
    , contributor
    Comments (63) | Send Message
     
    Who knows what AMD could have or would have done if Intel had not paid off OEMs,at the time AMD was cleaning Intel's clock with there CPUs so if AMD would have gained lets say 40% to 50% of the market when there CPUs was better witch it should have if Intel had not paid OEM's to keep AMD out then Maybe AMD CPU would be on top now considering that they would have had a much larger R&D budget to work with.I believe AMD has come up with some really nice nice CPUs & Gpus considering how low that R&D budget is now.
    12 Jun, 08:00 PM Reply Like
  • Roger 36
    , contributor
    Comments (63) | Send Message
     
    There is a difference between OK you can buy there chip for $200 or buy my chip for $200 and we give u $50 back nothing wrong with that but when u say OK to get that $50 off you have to buy 10 of are chips to 1 of there that's when it becomes a problem.
    12 Jun, 08:10 PM Reply Like
  • xxavatarxx
    , contributor
    Comments (2054) | Send Message
     
    How much cash does Intel have stuck overseas that they can't re-patriate?
    Isn't this just a drip in the bucket with their overseas cash?
    12 Jun, 05:28 AM Reply Like
  • Bruce24
    , contributor
    Comments (62) | Send Message
     
    Intel paid the fine back in 2009 or 2010, this latest announcement from the EU court is that Intel lost it's appeal.

     

    It will be interesting to see if Intel under their new CEO lets it be or rolls the dice with the one more appeal they are allowed.
    12 Jun, 09:47 AM Reply Like
  • toonies
    , contributor
    Comments (393) | Send Message
     
    Time to create FB party "Intel outside" to show that customers primarily do not like this kind of behavior.
    The fine is very similar to amount what Intel paid directly to AMD to avoid trail in USA.
    12 Jun, 05:58 AM Reply Like
  • toonies
    , contributor
    Comments (393) | Send Message
     
    Typo: trail>>>trial
    12 Jun, 06:16 AM Reply Like
  • toonies
    , contributor
    Comments (393) | Send Message
     
    Judgement here: http://bit.ly/1kQwqIX
    12 Jun, 06:28 AM Reply Like
  • techy46
    , contributor
    Comments (5456) | Send Message
     
    It's amazing how much hypocrisy the EU socialists and US capitalists put forth.

     

    What's the difference between contra revenue and giving volume rebates? Why does the US think it has the right to fine France's BNP for violating US trade sanctions? How can the EU demand that Microsoft allow 3rd party browsers to be installed on Windows? The EU and US regulators and spies are out of control with China, India and Russia looking on and saying just wait until we're equal. Now France says they are thinking, read threatening, about dumping the USD for trade with Asia. Just wait for the carbon trade wars. China's going to say we'll do that when you stop having 3-5 kids and dumping your plastic diapers in landfills. I still like to visit San Diego beaches but feel a lot better when I fill up at Love's with $3.50 gas in Yuma.
    12 Jun, 10:57 AM Reply Like
  • Bruce24
    , contributor
    Comments (62) | Send Message
     
    >>> What's the difference between contra revenue and giving volume rebates?

     

    It's not rebates that are the issue, it's the conditions required to get the rebates that is. toonies provided the link the judgment which provided some examples:

     

    "Accordingly, Intel granted rebates to four major computer manufacturers (Dell, Lenovo, HP and NEC) on the condition that they purchased from Intel all or almost all of their x86 CPUs. Similarly, Intel awarded payments to Media-Saturn, which were conditioned on its selling exclusively computers containing Intel’s x86 CPUs. According to the Commission, those rebates and payments induced the loyalty of the four manufacturers listed above and of Media-Saturn and thus significantly diminished the ability of Intel’s competitors to compete on the merits of their x86 CPUs. Intel’s anti-competitive conduct thereby resulted in a reduction of consumer choice and in lower incentives to innovate. "
    12 Jun, 11:40 AM Reply Like
  • metaforex1947
    , contributor
    Comments (12) | Send Message
     
    Good news for AMD! If they win the settlement money it will eliminate a lot of their debt (+or-) 50% or from 2B to 1B, which is HUGE and will certainly be reflected in their stock price. Really the debt has been the only negative on this company so far, but now I see it as being a good R&D gamble/investment on behalf of AMD. Very bold about them winning a settlement they once lost to Intel. If this doesn't scream, "Come Back!" at you than I don't know what does.
    12 Jun, 01:30 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7809) | Send Message
     
    See my comment at the top - the fine, once paid, will not go to AMD.
    12 Jun, 02:00 PM Reply Like
  • Bruce24
    , contributor
    Comments (62) | Send Message
     
    >>> If they win the settlement money

     

    You seem confused.

     

    This is about an EU commission fining Intel for anti-competitive behavior back in 2009. At that time Intel paid the fine, but filed an appeal which they just lost. This means unless Intel tried another appeal, the EU will keep the money.

     

    AMD also sued Intel in 2005, and in 2009 they settled with AMD getting $1.25B and a way more favorable cross licensing agreement.
    12 Jun, 02:08 PM Reply Like
  • metaforex1947
    , contributor
    Comments (12) | Send Message
     
    @Bruce24

     

    Oh, ouch. Yeah ok I can see that now, just got a bit excited with the rising stock price on AMD. It's the most movement I have seen in forever, looking forward to see what happens.
    12 Jun, 02:43 PM Reply Like
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