EC ramps up PR war with Intel (by publishing 518 page decision)

EC ramps up PR war with Intel (by publishing 518 page decision)

Summary: The European Commission has an answer to Intel's contention that it made a bevy of errors in fining it for anti-competitive behavior against rival AMD: It published all of its evidence.

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The European Commission has an answer to Intel's contention that it made a bevy of errors in fining it $1.45 billion for anti-competitive behavior against rival AMD: It published all of its evidence.

The EC, the regulatory watchdog of the European Union (EU), published its entire ruling (statement, Techmeme, ZDNet UK). Intel obviously still has problems with the EC's ruling, but the European regulators figured it was best to throw the decision to the public and let folks decide for themselves. The game: The EC wants to win in the court of public opinion too.

Among the key highlights:

  • Intel rebates to Dell from December 2002 to 2005 were based on Dell buying Intel chips exclusively.
  • HP had to buy 95 percent of its CPUs from Intel to get rebates from November 2002 to May 2005.
  • NEC had to buy 80 percent of its CPUs from Intel if it wanted rebates between October 2002 and November 2005.
  • And there's a lot more deals in the EC's filing that regulators argue Intel concealed.

ZDNet UK: EC reveals details of Intel antitrust breaches

But here's the problem. There's no way to make heads or tails of the EC's filing. For starters, it's massive. And if you scan a few pages you quickly get to a situation of "EC said, Intel said."

What is clear is that the EC and Intel are taking their legal fight public in a big way. The key snippets revolve around Dell's rebate deal with Intel. Intel argues that Dell's documents show Intel exerted no pressure on the PC maker. The EC argues otherwise and released the following snippets (page 66 starts a bevy of footnotes about the Intel-Dell relationship):

Dell, which until September 2006 was an Intel-exclusive x86 CPU purchaser, explicitly pointed out to Intel how AMD was a growing threat to their own products: "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 an internal Dell e-mail of 26 February 2004, it is stated: "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] if Dell joins the AMD exodus. We get ZERO MCP for at least one quarter while Intel 'investigates the details' (...) We'll also have to bite and scratch to even hold 50%, including a commitment to NOT ship in Corporate. If we go in Opti, they cut it to <20% and use the added MCP to compete against us."

Dell submitted to the Commission that "during the 2003-2005 time-frame", the "MCP arrangement was not explicitly conditioned on exclusivity or minimum volume commitments. At the same time, it was negotiated against the historical backdrop of Dell products being based solely on Intel processors." Dell has further specified that it "believed that, as Intel's largest customer, it was able to obtain a higher level of discounts than its competitors (although this could not be objectively verified)."

Those comments, which are really just an appetizer, either illustrate some mass conspiracy or a great deal for Dell since it distributed millions of Intel chips. The best move to handle this huge filing is to search the PDF based by PC vendor name---Acer, Lenovo, HP etc.---and read some juicy nuggets.

Happy reading.

Topics: CXO, Dell, Government, Government US, Hardware, Intel, Processors, IT Employment

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41 comments
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  • Not a big surprise

    The EC is a protectionist tool extorting technology and money from the creative genius of the US and other countries outside the EU. If you are successful, you are a target.
    haikued2
    • Are you serious?

      Wow. Now wake up from your dream and join the real world.
      almoore66@...
      • Actually he's right...

        You should read the EC's antitrust laws, they're all about protecting competition. Period.

        Yes, I read them when someone from the EU was kind enough to provide the link to their online site where the EC keeps digital copies of their antitrust laws.

        It's very enlightening. Success makes you a target of the EC.
        PollyProteus
        • Success makes you a target

          only if the only way to succeeded is to engage in unethical practices.

          There are still those among us who believe it possible to hew to high standards of conduct and achieve success.
          IT_User
    • Isn't AMD an US company?

      Many european companies in many commercial fields were filed for unfair behaviour, way before Intel was. EU States were filed, too. It seems that you are
      1) not well informed, or
      2) a lot badly disposed towards Europe.
      If point 1 is true, I suggest you read the EC sites about antitrust laws and ruling. If point 2, I make you present that the United States always have been hostile to the imports from the Europe of foods and beverages (cheeses and wines from France and Italy in first place). US laws were not only exagerately restrictive, but in some case quite stupid. Sometimes it seems that Americans think thay have the monopoly on patents...
      In both cases, I think you should consider that the Intel filing does NOT favor European companies, but an American company.
      And, before you reply that "...Microsoft too was pursued", I'll say that MS has many Europeas sites, and thus it employs a lot of european people...
      Maurizio Albera
  • RE: EC ramps up PR war with Intel (by publishing 518 page decision)

    Wow. Now wake up from your dream and join the real world.
    almoore66@...
  • RE: EC ramps up PR war with Intel (by publishing 518 page decision)

    Well that says it all, perhaps the EU should fine the
    companies involved too for being so complicit and not
    standing up for the consumer. Im sure if Intel lost a lost of
    business that way they soon go running round to the back
    door grovelling
    Paul Evans
  • RE: EC ramps up PR war with Intel (by publishing 518 page decision)

    Since when does offering a rebate break a law? I don't buy computers unless a rebate is offered. Maybe AMD should get on the rebate wagon.
    ITOdeed
    • RE:RE: EC ramps up PR war with Intel (by publishing 518 page decision)

      [We are talking about corporate rebates here, not the ones you get as a consumer from best buy. They are not the same thing.]


      They are illegal when rebates are being offered to lockout a competitor from a market. Also, if they were truly "rebates" they should've been dependent on the quantity of items ordered, not percentage of systems containing chips. Intel was trying to guarantee AMD chips would not be sold.

      I don't think the word rebate should be used in this case either. It is bribery plain and simple.
      rdiekema@...
      • Rebate or not rebate

        You said:
        "They are illegal when rebates are being offered to lockout a competitor from a market"
        Right! and that's the point.
        It's not US vs. EU, or EU vs "Success Companies".
        It's Intel vs. AMD, in a totally illegal way.
        And I think the Antitrust Authority intervention was fair and adequate, but unfortunately too slow... Intel already have taken a huge advantage from its behaviour, lowering competitor's revenues and, thus, slowing down AMD's R&D; that's bad to AMD and worst to customers, and, last but not least, to the technical progress.
        Maurizio Albera
    • actually it's not the rebate itself

      It's that they tied the rebate to the exclusive use of intell chips.

      Ken.
      merc2dogs`
      • Actually according to Dell it was neither

        According to Dell it wasn't tied to either volume or percent of share.
        Johnny Vegas
  • unfortunately it's a little too late

    AMD doesn't quite have the resources INTEL does, so playing catchup isn't going to work too well for them.

    ah well...
    anyone for dancers in colorful bunny suits?
    CaptOska
    • Well...

      I think this EC ruling and findings of fact leave Intel open to either being sued into the stone age by AMD (my preference/bias/desire!) or placed under direct regulation (of some sort) for any/all of their operations in the EC for the forseeable future.

      So, too little, too late. Nah, I don't think so.
      zkiwi
    • I will continue to recommend AMD products..

      to all my clients.

      The get a good deal (price/performance) and it helps promote competition. Which is what Intel trying to eliminate.

      ---

      Right now.. Intel only (CPU/GPU) laptops suck eggs. Intel graphics processing units(GPU) perform like dogs in 3d and on games.

      Low end Intel/Nvidia combos are also risky since Nvidia screwed up on some thermal issues and won't come clean and purge the pipeline of defective chips.

      Stick to purchasing AMD/ATI laptops for the next few years.
      thetruth_z
  • RE: EC ramps up PR war with Intel (by publishing 518 page decision)

    Common - Intel paid company's not to use AMD cpu's. That's not allowed in the EU - and the EU is right. It's no free market anymore it's some kind of nice looking Al Capone mechanisme.

    You may give rebates - it's not forbidden - you may give rebates on any amount of cpu that gets sold - but you may NOT forbid to buy other cpu's from other vendors. That's anti-competitive.

    That's why Intel has to cough up some pocket-money - and that's why Micro$oft got fined.

    But Americans don't seem to get that the free market needs some regulations to keep it a free, honnest market.

    Too bad - you see what a mess it got us into... (Lehman and the near collapse of the world's banking system - due to american greed!)
    Mutley Dastardly
    • American Greed???

      Uh... it's called Capitalism. Not greed. Please learn your terms before posting. :-)
      ITOdeed
      • Nah, it's greed

        You saying that ignoring or contravening rules/regulations/laws to make more money isn't a symptom of greed but rather capitalism, then I guess you failed business ethics, and cannot or will not distinguish between capitalism and greed. There is a difference.
        zkiwi
      • Deliberate actions

        to inhibit a free market is not capitalism. It's anti capitalism. You should work a bit on the terms before taking another to task.
        IT_User
    • American?

      Last time I looked, all of the financial companies that took a hit from their shady practices were international companies. Foreign direct investment in the U.S. is substantial (even in US based companies). So how does that make the greed solely American? If you think that the greed is confined to American companies, think again. I think it spans worldwide.

      Additionally, I agree that Intel's practices have resulted in their being fined. Now they are throwing a fit because they got caught.

      Oh, and by the way....for all of those flamers out there criticizing Intel in favor of AMD. Neither have performance increases over the other that are substantial enough to make a large difference. Both have flaws. Enough said.
      kc117mx