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Intel CEO says EU decision "wrong"

Will appeal
Wednesday, 13 May 2009, 12:41

INTEL CEO, Paul Otellini, has said his firm "takes strong exception" to the EU verdict declaring Intel guilty of breaching European antitrust laws.

"We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace characterized by constant innovation, improved product performance and lower prices," said Otellini, adding "there has been absolutely zero harm to consumers. Intel will appeal."

The EU fined Intel €1.06 billion for "engaging in two types of practices which have harmed competition". The European Commission said Intel has been found guilty of using rebates to freeze competitors out of the X86 market and making direct payments to OEMs to delay the launch of competitor products and stock only computers with Intel x86 CPUs.

In response, Otellini has said he doesn't believe Intel's practices "violated European law," saying it was all just the "natural result of a competitive market with only two major suppliers" where one firm "wins sales, the other does not".

Otellini raged against the EU machine, claiming that the directorate general for the Competition Commission "ignored or refused to obtain significant evidence that contradicts the assertions in this decision".

This "significant evidence" purportedly shows "that when companies perform well the market rewards them, when they don't perform the market acts accordingly." Yes, but a little bit of rebate stick and carrot doesn't hurt either, does it Intel? Oh, wait, actually it does. Ouch.

The Intel chief denied Intel had sold its wares off cheaply to court OEMs, adamantly declaring "Intel never sells products below cost". He admitted, however, his firm did believe it could "discount our products to compete in a highly competitive marketplace".

Otellini said that despite his "strongly held views" on the matter, his firm would "work with the Commission to ensure we're in compliance with their decision."

So, what does this mean? In a question and answers sheet released by the EU along with its statement, the commission says "Intel is obliged desist from the specific practices identified in this case and not to engage in these or equivalent practices in the future." This holds true for "any abusive practices that have an effect within the European Economic Area (EEA)."

The EU, cleverly anticipating Intel's shriek that the Commission was simply stifling technological innovation, explained the firm had itself stifled innovation and limited consumer choice "by preventing innovative products for which there was a consumer demand from reaching end customers". It added that, "Such practices deter innovative companies which might otherwise wish to enter and compete in the market."

The EU was also emphatic the case was "about the conditions associated with Intel's rebates and payments, not the rebates and payments themselves," adding, "What is at stake here are loyalty or fidelity rebates".

The commission also says Intel "paid clients" to delay or not launch computers incorporating AMD CPUs, something Intel General Counsel, Bruce Sewell, vehemently denied, saying "that's not how we do business." µ

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Comments
Feel de Wrath of de Rasta !

Emancipate meself from mental slavery, non but da EU can free our minds...

posted by : Rasta Foureyes, 13 May 2009 Complain about this comment
Intel buys open source firm

IBM offers real time analysis software

posted by : Rabindra, 13 May 2009 Complain about this comment
1 billion slaps

So Intel gets the spanking of a life time...this is a moral victory for AMD...but what about AMDs bottom line?

If Intel caused AMD loss of profit, is AMD not entitled to compensation?

Share the wealth Intel, we need AMD to make desktop processors that cost less and deliver more. A £1000 processor that delivers 30% performance for triple the price just doesn't cut it.

posted by : Someone Special, 13 May 2009 Complain about this comment
Too little too late

Stopping the actual practices while AMD had a market advantage would have been useful, but when they're on bottom, it doesn't help so much. The only good thing is that when (if?) AMD gets the advantage again they will be able to make hay while the sun is shining. Last time INTC was able to prevent AMD from extracting the full advantage of their position.

I do think that there's an advantage for the box builders in keeping a certain amount of business with AMD to prevent INTC from getting that much leverage on them ever again.

posted by : Colin, 13 May 2009 Complain about this comment
simplified...

sounds to me like he is not disputing intel's behaviour, but whether or not that behaviour is illegal.

so the facts remain - intel DID use aggressive marketing and financial incentives (bribes?) to coerce customers to choose their product over others.

they just think it is ok to do business in this manner.

2 words: no conscience

posted by : jeremy gandy, 13 May 2009 Complain about this comment
AMD can't compete

AMD can't compete that is got nothing to do about Intel. Intel has better products. I used once AMD and I will never do it again

posted by : Ken, 13 May 2009 Complain about this comment
EU Protectionism

This is all about EU protectionism of their dying semiconductor business.

I hope Intel gets really pissed now and crushes AMD, Philips and ARM.

posted by : mike, 13 May 2009 Complain about this comment
Protectionism by any name!

That's what it is, pure & simple protectionism in favour of AMD, by the undemocratic morons in the EU.

As has been said above,in general, Intel reigns supreme in the performance
league.
AMD can ONLY advance with the support of the EU gravy train monkeys.

The EU is a business cartel & should be broken up,to say it stands up for the consumer is absolute BS.

posted by : Anon, 13 May 2009 Complain about this comment
EU to sign off marketing programs

This is the logical consequnce of todays verdict.

So the EU needs to set up a new authority which controls and offically signs off marketing programs of big corproations.

?

posted by : Fred_EM, 13 May 2009 Complain about this comment
@Mike, Ken and Anon

Why don't you boys give Intel some of your pocket money to help them pay this little one off? Send them an email saying, "The EU doesn't like creeps that deal in bribary and corruption destroying their free and fair market place".
To most everyone else i.e. the consumers agree, what Intel did was wrong, monopolistic and bad for the free market as a whole.
Obviously, you shower don't get it!
why don't you monkeys hire a convertible, do a Thelma & Louise driving off the nearest cliff and do us 'all' a favo(u)r?

Lots of love,

Dave xxx (Three kisses for three monkeys)

posted by : Dave The Rave, 13 May 2009 Complain about this comment
This is just EU's way to extract money

If it weren't they'd give ALL of it to AMD. If Intel was wrong, AMD deserves every penny of that money.

Go Intel!

posted by : ssj4Gogeta, 13 May 2009 Complain about this comment
@Dave

Who is "the consumer" that you spoke of that is "agreeing" with you?

Is it you and your dog?

posted by : wut, 13 May 2009 Complain about this comment
Zero harm my ass

Zero harm my ass, if I don't have a choice thats not harming my buying decision?

I can remember some years back when all the reviews were showing AMD kicking Intel's ass, so not wanting to build a PC at the time I went to the local retail stores looking for one, but I couldn't find one, every store was trying to sell me an Intel, some even told me Intel was better and when I said "so every review on the internet is wrong"? they would say something like, feel free to look around and would walk away.

At one store two salesmen even told me they got kickbacks from Intel for every PC they sold with Intel inside. I asked them what PC they run at home and they both told me they had just built one with the new AMD chip and that it was awesome.

I ended up going online, bought the parts and built it myself with the AMD and just like the reviews I read it kicked ass. Every PC I've built since for family, friends and myself has had an AMD inside.

I'm glad the EU fined Intel, I hope the US fines Intel even more.

Intel: "We did nothing wrong". Funny how they play dumb when it suits their needs ay?

posted by : GO AMD, 13 May 2009 Complain about this comment
shakedown

Those cheering for this should pause and reflect on governments shaking down successful companies to fill their own coffers and where that leads.
When AMD had the best products, they did well, now they don't and they aren't.

posted by : beck24, 13 May 2009 Complain about this comment
More Harm then good

For those that complain that AMD isn't able to compete currently I ask you one thing...what would AMD look like now with those lost BILLIONS from those lost sales? Intel stole from sales from AMD for their exclusivity kickbacks and those lost profits would have fueled more R&D. Imagine what AMD would have right now if they would have had those lost sales, Bulldozer might have been released a year or two ago instead of most likely being released Q4 of next year, AMD might have kept their fabs in house, and many more things might have changed in the AMD ecosystem.

Personally this is a good ruling and I hope the US nails Intel to the wall too. And I agree that any fines imposed on intel should be divided up to those that Intel harmed...

posted by : Ben H, 13 May 2009 Complain about this comment
The stupidiest solution

"This is all about EU protectionism of their dying semiconductor business.

I hope Intel gets really pissed now and crushes AMD, Philips and ARM."

Way to go mike. Just annihilate the whole competition and create the Intel monopoly once and for all.

Then the prices will be dictated by just one company. But of course we don't live in capitalism. Intel will bring prices down and customers will be happy. Damn the profit !!!

What a great solution. Never thought of it .

posted by : maia, 13 May 2009 Complain about this comment
The boogie man

"Those cheering for this should pause and reflect on governments shaking down successful companies to fill their own coffers and where that leads."

This has not do with being successful or with governments. This has to do with the justice system - the EU is not a state with a government, it's a federation - and controlling some economic liberties which damage equality of opportunity in the EU market.

The question is pretty simple. Under EU law, companies cannot engage certain practices that deter other companies from having the same business opportunities. Intel did so and now they're being punished.

But anyway. I understand some US people. The idea that "anything goes" in business. The idea that when law is applied to punish abusive economic behaviour then it's the government way to mess up the economy.

The thing is they're wrong. If there's any purpose in gov regulation then it's cases like this that justify such regulation. For god sake, governments are not interested in destroying companies or the economy. It just doesn't make any sense. They are interested on making all the players play fair.

To some, this is really hard to understand ... there comes the boogie "gov" man !!!!!

posted by : maia, 13 May 2009 Complain about this comment
Oh Dear, They're Back Again...

Or did they just stop reading and contributing to Daily Tech?
Reading some of the comments posted here it's clear that we have a vast tract of Neo Con (G Dubya-Loving) Red Necks reading the Inq.

You know the type:
1) I fill my car up with enough gas to make a CO2 fog that would cover Europe, cos I don’t live there. I can afford to do it and how dare anyone tell me otherwise.

2) I can decide to wage war on anyone that disagrees with my point of view, cos I don’t live there, I can afford to do it and how dare anyone tell me otherwise.

3) I live in a country where money talks (N.B. he means, that if you’re poor then your option doesn’t count)

4) Point 3 some more: I can buy off anybody because I can afford it (e.g. Intel) regardless of what people might want; they get what I can influence. That’s right and fair because I can do it.

5) More of 4: I live in a free country (so he thinks) and I can do exactly what I want with my money that I worked hard for. Regardless of the effect this has on other people, I can afford to do it and how dare anyone tell me otherwise.

6) More of 5: I have enough money to lobby politicians to get what I want! This means we get to vote in a bi-polar democracy in which both sides stand for the two biggest money groups in my country. What a wonderfully fair system and I wouldn’t have it any other way.

7) I’ve sometimes travelled outside my country, but I’ve been in a bubble of delusion that these other countries take tax from their people and pay for a national health service. I know that means healthcare for everybody, but I wouldn’t give any of my money towards such a scheme. Why should I pay for anybody else’s healthcare? Then again, I’ve never been seriously ill, so I’m not worried. I can also pay the extortionate insurance costs of my plan; trouble is it doesn’t cover me for long-term illness and has a load of other clauses excluding many other conditions I may develop. Anyhow, those commie suckers still pay less than I do. It must be because my standard of healthcare is way better than theirs?

8) Anyone who criticizes my way-of-life is a Liberal, commie-loving, Bolshevik (Get Joseph McCarthy on the phone, Now!)

9) I know what I’m talking about because I hear it on the radio and see it on the TV. Despite all the media being under the same control as the politicians; they tell me exactly how it is. Ask me anything and I’ll regurgitate MSNBC, FOX NEWS... you name it, I’ll tell you!

10) We are a free market economy! (yeah, right?) We are a free country! (yeah, right?) We are a democracy! (ummm... Yawn...)

11) The words arrogance, narcissism, ignorance, stupidity, prejudiced: they all seem to fit, but they don’t mean me? It’s those European commies!

12) I saw a movie once. I think it was French with those damn subtitles, why can’t they speak American? (Eh?) It showed that growing as a nation over thousands of years is a very painful process, but they did get it sorted out in the end. Mind you, a lot of people got killed in the process! I guess we did pretty well over the past 200 years. (You think so? Check with Amnesty International and count the number of wars you’ve had since then)

13) Those lazy commies make me sick. We work hard in this country. (You sure do! 6-7 day weeks, 2 weeks vacation - unless you’ve been ill and had to use some of your vacation days for that – more suicides, stress, depression, serious crime, therapists and worry than any other peoples in Europe)

14) Weapons of Mass Destruction (Oh, those. Did you find them?) No, but we got in there and we’ll come out of there with a lot of oil paid to us as debt for invading them – let alone all the contracts to re-build the place after we blew it up and totally destabilized the area.

15) Listen, how much longer is this going on cos’ I got a warehouse full of problems I need to get off my chest before I see my shrink. Otherwise, I’ve got some Kool Aid under the sink! (Don’t worry, we understand. Just do me a favour will you?) You name it!

(STFU and when in Rome, do as the Romans do?)

I’ll take a rain check on that as I’m off to see my shrink......

(Thought as much......)

posted by : Dave The Rave, 13 May 2009 Complain about this comment
Duh

Otellini said that despite his "strongly held views" on the matter, his firm would "work with the Commission to ensure we're in compliance with their decision."

Translation - "We are going to stop doing what we didn't do."

Duh.

posted by : Hucklebuck, 14 May 2009 Complain about this comment
Otellini belongs in prison

Otellini belongs in prison with Bill Gates for the next 20 years as they are both convicted criminals.

posted by : Jorge, 14 May 2009 Complain about this comment
EU stimulus plan

If you can't collect enough in taxes you just fine corporations. Makes perfect sense, gotta pay for the univeral healthcare and the lazy who don't work at all.

posted by : Tim, 14 May 2009 Complain about this comment
@Dave The Rave,

Nice post. A bit 1-sided, but funny.

If a company has been ripping "us all" off, then i just don't understand how anyone can defend it. They also got ripped off, but seem happy and want to be ripped off some more. It's illogical captain.

posted by : interested_party, 14 May 2009 Complain about this comment
The game

"If you can't collect enough in taxes you just fine corporations. Makes perfect sense, gotta pay for the univeral healthcare and the lazy who don't work at all."

Yeah sure. That's why the state also finances banks in the financial crisis. They want to destroy the healthcare system.

Bottom line, both arguments don't make sense ...

What makes sense is regulation. Would you watch a football game without a referee ? It wouldn't make sense if not to watch players getting hurt.

I don't know if you understand this but if you believe in the system you also believe justice works for a reason: to mediate disputes. This dispute Intel vs EU had to had a referee: the courts. If you're still with the system till this point you should recognize there must be a punishment for not respecting the law. Which is the case.

Another thing you should remember is that any democratic republic has not only liberty but equality and democracy as their basis. You can ask for more liberty only if equality (justice) and democracy (option) are upheld.

This free market idea is all a big anarchic economic system were all players compete without any rule but the rules of the market itself. Like football players making their won laws or rules to play the game. Well, people are still watching the game, the neo con game with no referee. Hopefully the game will end ...

posted by : maia, 14 May 2009 Complain about this comment
@Dave

You could have saved a lot of time and effort by just writing, "I'm an idiot." We would have taken you at your word!

posted by : Ryan, 14 May 2009 Complain about this comment
@Ryan

The truth hurts, doesn't it Ryan?

You don't know anyone like the people I was writing about do you?

(Thought so....)

Love,

Dave xxx

posted by : Dave The Rave, 14 May 2009 Complain about this comment
EU needs some cash

a couple things to think about...

1). EU say intel hurt consumers? Yet where is the evidence?
a. higher prices? -nope
b. no product innovation during the time in question? -nope
c. No choices? so AMD did not see a single CPU during that time? .. -nope

2). Intel paid oem to not sell AMD? Lets see the evidence and why did the EU refuse to look at of Intels evidence that refutes this? hummm...

3). Intel agrees to comply with the EU regulation. OK.. finally something here.. oh wait its like 500 pages longs and last time i saw a press from intel they indicated they were reviewing the 500 page ruling but were mistified cuz they still could not find where there were not in complience.

I may be over simplifing this but.. Something just does not add up here...

posted by : me, 20 May 2009 Complain about this comment
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