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EU slaps a record fine on Intel

     
11:36 am on May 13, 2009 (gmt 0)

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[news.bbc.co.uk...] chipmaker Intel has been fined a record 1.06bn euros ($1.45bn; £948m) by the European Commission for anti-competitive practices.

It dwarfs the 497m euro fine levied on Microsoft in 2004 for abusing its dominant market position.

The Commission found that between 2002 and 2007, Intel had paid manufacturers and a retailer to favour its chips over those of Advanced Micro Devices (AMD).

Intel has announced that it will appeal against the verdict.

Kaled.

12:27 pm on May 13, 2009 (gmt 0)

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I find it hard to believe that anyone at intel would have even uttered the words 'Advanced Micro Devices' with it's retailers, it should be an interesting appeal.
5:01 pm on May 13, 2009 (gmt 0)

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I thought these sort of practices was normal. Though I donít agree with it, does it not happen everywhere? Supplier exclusivity contract - If you buy our stuff then you cant buy anyone elseís. Doesnít Microsoft still do this to curtain extent with computer manufactures?

With that sort of money, Intel will be financing the whole European commission for a few years then! Well, actually, its about 3 months.

[edited by: Seb7 at 5:18 pm (utc) on May 13, 2009]

6:01 pm on May 13, 2009 (gmt 0)

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Normal it may be, legal it's not (in Europe).

I agree that that funding the EU is inappropriate, most of the fine (80%) should be paid to AMD. Now that really would upset Intel.

As a matter or principle, companies should not be allowed to use a position of market dominance to strike secret deals to stifle the competition. It is impossible to argue that such deals favour consumers, therefore fines should be heavy. If it were up to me, I would lock up the culprits for 5-10 years.

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8:00 pm on May 13, 2009 (gmt 0)

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Good move on the side of the EU commission. Too much monopolization is a big hurdle for capitalist market, it's time companies like Intel, Microsoft and to some extent Google (at least G is following standards and inter-operating) realize they put sticks in everyone's wheels.

[edited by: Hugene at 8:01 pm (utc) on May 13, 2009]

8:19 pm on May 13, 2009 (gmt 0)

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Damn! How much is Intel worth with a fine like that?
9:00 pm on May 13, 2009 (gmt 0)

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>I thought these sort of practices was normal.

There are many things a company does, and can legally do, when it's NOT in a "dominant position" in a market -- but that become coercive (and therefore appropriately illegal) when done by a monopolist.

Purchasing agreements that "exclude" competitors are HIGH on that list.

9:05 pm on May 13, 2009 (gmt 0)

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Not suggesting it is headed that way, but this type of judgment opens Google to similar lawsuits. A precedent has been set. Not excusing Intel, they took it a step further, but do read the commission's comments and one can see it being applied against other large successful companies.
9:16 pm on May 13, 2009 (gmt 0)

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but do read the commission's comments and one can see it being applied against other large successful companies.

It's a fantastic new revenue stream. But the money will never effect their judgement of course.

11:04 pm on May 13, 2009 (gmt 0)

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Of course! :)

1 for you, 1 for me, 2 for the guberment. :)

1:33 am on May 14, 2009 (gmt 0)

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this type of judgement opens Google to similar lawsuits
How, why?

If google operated a policy of discriminating against sites that have adverts provided by the likes of Yahoo, then Google could find themselves in the dock, and rightly so, but if they avoids such actions, then they have nothing to worry about.

Kaled.

3:47 am on May 14, 2009 (gmt 0)

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@kaled ... redistribution of wealth ala "fairness" and lowest common denominator. US is catching up, EU just got there first.
3:50 am on May 15, 2009 (gmt 0)

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The Wall Street Journal has an interesting take on this issue:
Target: Intel, and Competition [online.wsj.com]

But Ms. Varney can be sure of a friendly ear in Brussels, which has never let go of the idea that competition is best when there isn't much of it. The Commission's attitude is on full display in the fining of Intel for allegedly abusing its dominant position in the market for computer processors. For years, Intel and AMD have been essentially the only game in town for computer CPUs. The Commission's complaint amounts to little more than a whinge that Intel won more of this business than the Commission would prefer.

2:32 pm on May 15, 2009 (gmt 0)

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I think the US should sue the EU because the EU has a monopoly on suing big companies.
2:46 pm on May 15, 2009 (gmt 0)

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I think the US should sue the EU because the EU has a monopoly on suing big companies.

I think the US was building a case against MSFT (the previous record holder for fines from the commission). But I guess MSFT's lobbyists were successful in removing that threat.

The thing is if Intel wants to sell in the EU, it'll have to play by the rules of the EU regarding competition. And After MSFT was slammed a few times already for similar abuse, Intel had been given ample warning. Let's not forget the commission is known for slapping countries that don;t play within the rules, so slapping a company isn't that difficult, even if it's a big one.

Airlines better watch out ... as do Telcos both are being watched for practices towards consumers that aren't kosher and they'll get increasingly important threat of action if they don't comply.

8:02 pm on May 25, 2009 (gmt 0)

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I wonder what the daily interest is for non payment....