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

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.

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.