Short version: Intel has been accused of abusing their market power and other actions.
Quote:BRUSSELS — European antitrust regulators, which have been aggressively pursuing what they see as anticompetitive practices among technology companies, could impose their largest fine ever in a market-dominance case against the chip maker Intel.
The size of the penalty will be discussed by representatives from 27 European Union governments in early May. The decision would follow landmark rulings by the European Commission against Microsoft, which also is being investigated over its Internet Explorer browser, and a settlement with I.B.M., which is again the subject of a complaint.
The commission began investigating Intel in 2000 after Advanced Micro Devices, its archrival, filed a complaint. Both chip makers are based in the United States.
In two sets of charges, in 2007 and 2008, the commission accused Intel of abusing its dominant position in computer chips by giving large rebates to computer makers, by paying computer makers to delay or cancel product lines and by offering chips for powerful server computers at prices below actual cost.
Intel has said that it has done nothing wrong and that European officials have investigated the case in a way that imperils its rights of defense.
“Over all, Intel’s conduct is lawful, pro-competitive and beneficial to consumers,” Robert Manetta, an Intel spokesman in London, said Wednesday.
Microsoft, the world’s largest software company, has faced the biggest financial penalties to date, accused of abusing its dominance. It paid a fine in 2004 of 497 million euros, or $663 million at current exchange rates.
In the Intel case, “I’d be surprised if the fine isn’t as high or higher than in the Microsoft case,” said Howard Cartlidge, the head of the European Union and competition group at the law firm Olswang in London. “Technology markets are where the European Commission has perceived particular problems due to dominant companies.”
Some legal experts speculate that Intel’s fine could reach about a billion euros, or $1.3 billion. Intel’s annual sales were $37.6 billion in 2008.
Michael Reynolds, a partner in the international antitrust group in Brussels at the law firm Allen & Overy, said such a large fine would be more likely in a case involving cartel behavior, which is not at issue with Intel.
European regulators have also fined Microsoft 279 million euros and 899 million euros on the grounds of failing to comply with European Union orders in antitrust cases, but these were administrative penalties.
The market research firm International Data Corporation says Intel had 81.9 percent of the global market for personal computer chips in December, compared with 17.7 percent for A.M.D.
The commission can fine companies up to 10 percent of their global worldwide sales for antitrust abuses. But applying the formula strictly could put companies out of business rather than lead them to change their business practices.
A person with knowledge of the commission’s deliberations said the agency was planning to highlight specific instances of suspected illegal discounting and order an end to those practices.
The European charges against Intel are confidential. But A.M.D. laid out some of its concerns about Intel’s behavior in Europe in a civil case filed in Delaware in 2005.
In that case, A.M.D. said its share of business with the European computer maker Fujitsu-Siemens fell after Intel offered a “special discount” on chips. According to A.M.D., Fujitsu-Siemens accepted the discount in exchange for hiding references to A.M.D. computers on its Web site and in a retail catalog.
A.M.D. also said in the case that a leading retailer based in Germany, Media Markt, carried Intel computers exclusively in exchange for annual payments by Intel. In Britain, DSG, the parent company of the retailers Dixons and PC World, limits A.M.D.’s share of its business to less than 10 percent because of payments by Intel, according to A.M.D.
Intel has been engaged in a lengthy, multifaceted battle with antitrust authorities across the globe. In Japan, Intel agreed in a consent decree in 2005 to modify its practices, without admitting wrongdoing. In the United States, the Federal Trade Commission is also investigating.
In June, the Korea Fair Trade Commission fined Intel 26 billion won, or about $19.5 million at current exchange rates, for abusing its dominant position in the microprocessor market by offering rebates to South Korean computer makers in a way that unfairly harmed A.M.D. Intel has appealed in that case, saying that the Korean commission failed to understand the workings of the microchip market and neglected to take into account important evidence.
- Source: [NYTimes]
So this is whar you dissapeared off to ZiNgA.... :P
And Oh noez D:
urg! 1st thanks for the sort version,. i guess this is like when microsoft went to court,.
I think they should bugger off!! intel made the right moves to ensure there perfect product to sell!! DUH!
There is't proof they intended this to happen,. maybe they just thought it was a good idee,. >?
Vegetano1 Wrote:urg! 1st thanks for the sort version,. i guess this is like when microsoft went to court,.
I think they should bugger off!! intel made the right moves to ensure there perfect product to sell!! DUH!
There is't proof they intended this to happen,. maybe they just thought it was a good idee,. >?
Not really, anti-competitive behaviour is quite an unfair thing and is only bad for consumers like you and me.
ZiNgA BuRgA Wrote:Vegetano1 Wrote:urg! 1st thanks for the sort version,. i guess this is like when microsoft went to court,.
I think they should bugger off!! intel made the right moves to ensure there perfect product to sell!! DUH!
There is't proof they intended this to happen,. maybe they just thought it was a good idee,. >?
Not really, anti-competitive behaviour is quite an unfair thing and is only bad for consumers like you and me.
Ah i see,. i thought it was good of Intel dropping the prices,.>?
In case of microsoft i did't really see a unfair bit,. just that microsoft invented a good product,. and then there is people trying to sue and make money winning cases,..
i Mean should Microsoft say:" O wee are sorry wee made such a good product,. wee will make it easier and spend time so other products work better with our product,."
I am not to sure whot Intel is doing,. thought they dropped consumer prices,..
Vegetano1 Wrote:ZiNgA BuRgA Wrote:Vegetano1 Wrote:urg! 1st thanks for the sort version,. i guess this is like when microsoft went to court,.
I think they should bugger off!! intel made the right moves to ensure there perfect product to sell!! DUH!
There is't proof they intended this to happen,. maybe they just thought it was a good idee,. >?
Not really, anti-competitive behaviour is quite an unfair thing and is only bad for consumers like you and me.
Ah i see,. i thought it was good of Intel dropping the prices,.>?
The price drops were exclusive and designed to get rid of competition.
Imagine this scenario. Let's say I own a 100% monopoly on the CPU market. Since I have a monopoly, I charge higher prices than I would if I were in a competitive market. Now since there's profits to be made, you decide to also join the CPU market, and since you want to grow, you price your CPUs below mine so that people go to buy yours (wee're ignoring barriers to entry here, and wee're assuming your CPUs are as good as mine). Now you're only a small business, and I'm a multi-billion dollar one with a dominant market share - how do I respond? I'll put my prices
below the cost to manufacture them, which is so low that if you were to sell at that price, you'd be losing money. Now, I lose money from this, however being a large company, I can withstand this for a while. You on the other hand, can't, so you are forced to quit the market. After you do, I raise my prices back to the original absurdly high level.
There's an example of price cuts which is harmful to competition.
Vegetano1 Wrote:In case of microsoft i did't really see a unfair bit,. just that microsoft invented a good product,. and then there is people trying to sue and make money winning cases,..
i Mean should Microsoft say:" O wee are sorry wee made such a good product,. wee will make it easier and spend time so other products work better with our product,."
I'll give you another example:
Let's say I'm MS and I want to promote my Zune product. Apple currently dominates the market, but that's okay, I'm bigger and I can use my market power to easily push them over. So I make Windows simply refuse to work with iPods. I also
pay all the major dealers & suppliers to stop distributing iPods.
In the end, who'll use an iPod if it's hard to get, and won't work on your computer anyway?
ZiNgA BuRgA Wrote:Vegetano1 Wrote:ZiNgA BuRgA Wrote:Vegetano1 Wrote:urg! 1st thanks for the sort version,. i guess this is like when microsoft went to court,.
I think they should bugger off!! intel made the right moves to ensure there perfect product to sell!! DUH!
There is't proof they intended this to happen,. maybe they just thought it was a good idee,. >?
Not really, anti-competitive behaviour is quite an unfair thing and is only bad for consumers like you and me.
Ah i see,. i thought it was good of Intel dropping the prices,.>?
The price drops were exclusive and designed to get rid of competition.
Imagine this scenario. Let's say I own a 100% monopoly on the CPU market. Since I have a monopoly, I charge higher prices than I would if I were in a competitive market. Now since there's profits to be made, you decide to also join the CPU market, and since you want to grow, you price your CPUs below mine so that people go to buy yours (wee're ignoring barriers to entry here, and wee're assuming your CPUs are as good as mine). Now you're only a small business, and I'm a multi-billion dollar one with a dominant market share - how do I respond? I'll put my prices below the cost to manufacture them, which is so low that if you were to sell at that price, you'd be losing money. Now, I lose money from this, however being a large company, I can withstand this for a while. You on the other hand, can't, so you are forced to quit the market. After you do, I raise my prices back to the original absurdly high level.
There's an example of price cuts which is harmful to competition.
Vegetano1 Wrote:In case of microsoft i did't really see a unfair bit,. just that microsoft invented a good product,. and then there is people trying to sue and make money winning cases,..
i Mean should Microsoft say:" O wee are sorry wee made such a good product,. wee will make it easier and spend time so other products work better with our product,."
I'll give you another example:
Let's say I'm MS and I want to promote my Zune product. Apple currently dominates the market, but that's okay, I'm bigger and I can use my market power to easily push them over. So I make Windows simply refuse to work with iPods. I also pay all the major dealers & suppliers to stop distributing iPods.
In the end, who'll use an iPod if it's hard to get, and won't work on your computer anyway?
at first i was like, ok,. but they earned the monopoly and maybe they did't even intend to be a big monopoly,.. but reading along,. its more like they are abusing there own good name and product for bad things/actions to make an even greater monopoly,.>?!
I still can't believe they would resort to such faulness!!
And yes maybe for a sort while wee/consumer will profit from low prices,. but after the faul-play they fudge the consumer again by making the cpu's expensive again and also included us in there faul play when they tempted us to buy there cheaper priced cpu!! they are mean!!
Whot if they would't do these things would they loose there monopoly and wee could't buy there good products or would wee see more other good products rise?
ZiNgA BuRgA Wrote:Vegetano1 Wrote:In case of microsoft i did't really see a unfair bit,. just that microsoft invented a good product,. and then there is people trying to sue and make money winning cases,..
i Mean should Microsoft say:" O wee are sorry wee made such a good product,. wee will make it easier and spend time so other products work better with our product,."
I'll give you another example:
Let's say I'm MS and I want to promote my Zune product. Apple currently dominates the market, but that's okay, I'm bigger and I can use my market power to easily push them over. So I make Windows simply refuse to work with iPods. I also pay all the major dealers & suppliers to stop distributing iPods.
In the end, who'll use an iPod if it's hard to get, and won't work on your computer anyway?
i was wandering|: microsoft intended to make incompatibility's or would they have to make more effort and spend time to make compatibility's?
Vegetano1 Wrote:I still can't believe they would resort to such faulness!!
These things happen
all the time and in many industries... You only really hear about it when it gets media attention though.
In fact there was a recent case in Australia where two dominant cardboard manufacturing firms engaged in price fixing.
Vegetano1 Wrote:Whot if they would't do these things would they loose there monopoly and wee could't buy there good products or would wee see more other good products rise?
They don't need to have good products to have a monopoly. Monopolies are never good for consumers - you need to understand that.
In the case of the CPU market, the reason where there are so few x86 CPU makers (Intel and AMD only) is partially because of "barriers to entry". It's not like anyone can just decide to start up a CPU manufacturing company - it requires quite a substantial amount of capital investment. On the other hand, variable costs are very low and profits per unit are high - it probably only costs Intel like $50 to make an i7 965 Extreme processor, but they sell it for like $2000.
There are lots of factors which go on, so there's no definite answer to whether they'll lose their monopoly or not, however doing anti-competitive measures is one way to keep them.
But if you have a monopoly, you'll generally try to keep hold of this monopoly as long as you can. If a new company happens to have a much more efficient process that you predict will cause you to lose this monopoly in the long run, you may be somewhat forced to into doing these sorts of actions.
Vegetano1 Wrote:i was wandering|: microsoft intended to make incompatibility's or would they have to make more effort and spend time to make compatibility's?
Microsoft, in general, seems to be trying to make incompatibilities.
http://en.wikipedia.org/wiki/Embrace,_ex...extinguish
Meh.... I always liked AMD more for no apart reason >.>