Intel Facing Huge Fines from European Union

03:40 - Thursday 30 April 2009 by Jane McEntegart
Source: Tom's Hardware US – Keywords: Intel, European, Union, Antitrust, Fine Category : CPU

Those European Union Antitrust regulators are having a busy week, folks, and today reports suggest the EU could impose its biggest ever market-dominance related fine on Intel.

Early in March we reported that Intel could be facing fines from the European Union in relation to the company’s pricing model. It seems the European Union has a big problem with the way Intel has been doing business, in particular rebates to computer makers and retailers. The European Commission said Intel’s pricing practices were an attempt to drive AMD out of the market and was set to rule on whether or not the company should be fined.

The New York Times today reports that the size of that penalty is to be discussed by representatives from 27 European Union governments in early May. However, we wouldn’t be so jacked up about the money itself. Sure, it could be the EU’s biggest fine handed out ever, but previous reports suggest that the maximum fine allowed would be 10 percent of Intel’s revenue, which while unpleasant, wouldn’t exactly clean the company out. The New York Times cites legal experts as saying Intel’s fine could reach roughly €1 billion, or $1.3 billion. Intel’s annual sales were $37.6 billion in 2008. However, there is a distinct possibility that the EU could impose new rules in order to remedy Intel's actions. Former Commission official Michael Tscherny hinted at just that last month when he spoke to Reuters and said the European Commission could destroy Intel’s pricing model.

Intel denies charges related to rebates offered as long as manufacturers agreed to obtain the majority of their processors from Intel as well as paying them to either to delay or cancel the launch of AMD based products. The company maintains that its actions were within legal boundaries.

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Talkback
PT88 30/04/2009 17:03
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Im not clued up on my legal boundaries, but paying a company money to delay or stop that company releasing products based on an Intel Rival seems like pure bribery to me, and Intel deserve all they get!!!!

waxdart 30/04/2009 17:19
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Company A - I'll pay you Z not to do that just yet.
Company B - No
Company A - Z times 3?
Company B - Yes.

That's good for little company B if they do well out of the deal.

skalagon 30/04/2009 22:10
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Yah this is pretty much against competition, intel should be ashamed. Its stuff like this that breaks capitalism, and we should treat ppl who do this kinda stuff harshly indeed.

mi1ez 01/05/2009 09:59
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skalagon :
Yah this is pretty much against competition, intel should be ashamed. Its stuff like this that breaks capitalism, and we should treat ppl who do this kinda stuff harshly indeed.



Forward Stalin!

HeHe! sorry, couldn't help myself!

Flameout 01/05/2009 10:44
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1 day someones gonna catch microsoft, intel, and nvidia all in the same bed

mactronix 11/05/2009 17:11
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What a load of hogwash, Business has been done like this from year dot. If company 1 can give a big enough incentive to customers to use their product over company 2's product then good for them. If its a cash bribe we are talking about to delay or cancel the launch of AMD based products then that's one thing and clearly wrong. However as far as the processors go my understanding of it is that they are/were basically offering a discount on X amount of stock. That's how all business works. Supermarkets do it to push down prices from the suppliers, Online hardware stores give price breaks on bulk orders. If you are going to fine Intel for that then you have to fine everyone.
So as far as part one of the charge goes the EU can go boil their colective heads as far as im concerned, they should stick to the clear cut stuff like the suposed bribes to hobble AMD based products.
Mactronix

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