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European Commission rules against Intel in antitrust case
Statement of objections issued to Intel because of its ‘overall anti-competitive strategy aimed at excluding AMD’
Following a massive worldwide antitrust probe issued by AMD, the European Commission has issued a statement of objections to Intel over its competitive strategy, which the EC says was deliberately aimed at excluding AMD from the processor market.
So what sort of devious practices has Intel been dishing out on its competitors? Well, according to the EC, Intel has firstly ‘provided substantial rebates to a leading European personal computer (PC) retailer conditional on it selling only Intel-based PCs.’ As well as this, the EC also says that ‘Intel made payments in order to induce a leading Original Equipment Manufacturer (OEM) to delay the planned launch of a product line incorporating an AMD-based CPU.’ As a final note, the EC also added that ‘in a subsequent period, Intel has provided substantial rebates to that same OEM conditional on it obtaining all of its laptop CPU requirements from Intel.’
While the EC broke the allegations up into three separate components, it also says that ‘all the types of conduct reinforce each other and are part of a single overall anti-competitive strategy aimed at excluding AMD or limiting its access to the market.’ Understandably, AMD is pretty chuffed with the result. AMD's executive vice president, legal affairs and chief administrative officer, Tom McCoy, said that 'Intel has paid a leading retailer to turn away AMD-based computers from leading global computer manufacturers, which can only be regarded as robbing consumers of their fundamental right to choose.' He also added that 'no antitrust laws anywhere in the world permit Intel to pay retailers and computer manufacturers to boycott non-Intel products.'
However, Intel still stands by its position that it’s done nothing wrong. In a response to the statement of objections, Intel says that ‘the Commission supports AMD’s position that Intel should be prevented from competing fairly and offering price discounts which have resulted in lower prices for consumers.’
Intel added that it was ‘confident that the worldwide microprocessor market is functioning normally and is highly competitive in Europe and elsewhere.’ Intel also insisted that its ‘conduct has always been lawful, pro-competitive and beneficial to consumers.’ The benefit of the competitive market, according to Intel is that ‘consumers have benefited from prices that have gone down significantly, output has increased many times over, and the performance of products, including ours, has improved exponentially.’
This isn’t the first statement of objections against Intel to be issued by the European Commission. The first was issued on 27 July 2007, and noted similar objections to Intel’s competitive practices.
AMD has been pursuing a worldwide antitrust suit against Intel for many years now, and detailed a lot of its issues with Intel when it made an antitrust complaint against Intel in the US in 2005. The accompanying document made for some juicy gossip, including Gatweway executives recounting that ‘Intel’s threats beat them into “guacamole”, as well as Compaq’s CEO, Michael Capellas ‘reporting that “he had a gun to his head,”’ and informing an AMD executive ‘that he had to stop buying AMD processors.’ Another allegation was that ‘Intel paid Sony multimillion dollar sums, disguised as discounts and promotional support, in exchange for absolute microprocessor exclusivity.’ AMD sensationally concluded that ‘Intel has resorted to old-fashioned threats, intimidation and “knee-capping” to deter OEMs from dealing with AMD.’
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All that window tapping obviously did some damage. MS were fined because of their media player, internet explorar, meesenger etc... Other developers claimed it wasn't fair that MS designed their own operating system costing many $millions to produce that over 95% of the entire planet use. And then have the cheek to offer a media player, an internet browser and communication tool in with the operating system for free. So the EC demanded that MS open it up to everyone else to get a piece of the pie. So they released the N version of Vista with no extras but still got fined many $billions. Doesn't matter whether you like those apps or not, the EC said we all needed to choose if we wanted it. Personally, I didn't see the problem as I could remove them anyway and install alternatives if I wanted to. Dell do the same thing now when they ship new PC's. They remove all the extras from Vista and replace them with advertising packed Google add-ins. I'm not sure this was what the EC had in mind but someone else is making money through it now.
Comment by crazyceo at 11:33am 21st July 2008
I thought that MS's fine was for inventing that bloody paperclip?
Comment by NewParadigm at 10:48am 21st July 2008
This could lead to prosecutions though couldn't it? MS was fined a lot of money due to their "foul play".
Comment by Bonzo450 at 9:38pm 19th July 2008
''Following a massive worldwide antitrust probe issued by AMD''......looks like AMD spat out the dummy and runs to the EU to try and sue Intel for whatever it can get. Backdoor? Or possibly just a way to hit back?
Comment by Lightning_Pete at 3:03pm 19th July 2008
Read it again, this is just a statement of Objections. Nothing more. No proven illegal activity has been shown against Intel. I understand this article just fine. I just wish others would read it before they wish for Intel to be banished from existance and AMD crowned the saviour of us of all! Sarcasm aside, let's just wait for the official verdict and not a bias money grabbing statement from the EC.
Comment by crazyceo at 12:20am 19th July 2008
I think it's disgusting. It makes me feel guilty to own an Intel CPU. I just feel bad for AMD who seem to have been playing fair, while Intel have been doing the dirty. And crazyceo, I think you'll find that the article states Intel has been judged against, meaning that it was found to be illegal... Also I'm pretty sure that Nikobellic was saying let's ignore him about you. I agree with him. You obviously don't understand this matter...
Comment by RedHotsRule549 at 10:58pm 18th July 2008
poor buggers at amd. they are getting shot at from every angle. intel needs to give them a break or amd will rage on them and really unleash hell with a line of secret products they have sumwhere taht are being developed on the low as we speak. amd are gunn lash abck soon. go AMD !
Comment by higson92 at 10:09pm 18th July 2008
Is that Intel have used a business strategy that hasn't been PROVED illegal. It's also a practice used by AMD. In this case however, Intel have been the main winners. It doesn't matter whether you are an AMD fanboy or not. Intel have done nothing wrong and haven't done anything that you wont find in any other industry. You supply the OEM's and offer incentives better than the competition. In return you ask for exclusivity (Is that a word or correct spelling?) AMD just didn't wet the beak's of the OEM's enough or at all. Don't be fooled by the European Commission ruling as fact or a conclusion. They don't like big American companies coming over here telling european companies how to do business. The OEM's know they have made a hell of alot more money with their involvement with Intel than they potentially could have with AMD. Microsoft was treated the same way, even after they released the N versions of Vista. In the end of the day, they are making much more money than they will ever be fined. They will also use the exact same method of business just like AMD will.
Comment by crazyceo at 7:42pm 18th July 2008
To be honest, Intel can't afford AMD to go bust, because if they do then the number of monopoly related business laws to kick in will be spectacular. I think we should just sit back and watch.
Comment by Zhaoman at 6:52pm 18th July 2008
the point you made that I was commenting on was "If AMD were in a stronger position than they are today, do you really think they would have made this complaint against Intel? I don't think so." I was merely pointing out that AMD DID make it when they were in a stronger position. Of course you can't blame Intel solely for their poor financial state, but it all makes a difference, larger financial companies always try this, that is why there are laws about it, to ensure, we, as these companies customers, and the employees of the rival companies don't suffer because of lack of competition. The facts we have are that a court has decided MS is guilty... unless you want to argue the whole legal system is that broken (thats a whole other flame bait thread) then MS were acting illegaly, whether you beleive it is fair practice or not is irrelevent
Comment by NewParadigm at 5:56pm 18th July 2008
He isn't going to understand what you all are getting at so just ignore him! - everyone else knows what you mean, and the primary point that everyone is trying to get at is that If AMD go bust, then we (the consumers) will suffer BIG TIME!!.
Comment by NikoBellic at 5:47pm 18th July 2008
Hi mate. I do understand what you're trying to say, but it just isn't as straightforward as you seem to think. Intel haven't only been 'wheeling and dealing', they've actively bribed OEM's and system builders to not stock or build AMD based products - and have actively threatened those that didn't want to go along with it, (such as either raising their own prices, or threats of delayed stock or no stock at all - thus ruining the manufacturer/suppliers business) . Using a dominant market position to shut-out the competition isn't 'strong' business practice, it is a criminal offence. Intel have been found guilty. AMD will NEVER be able to improve it's market share (irrespective of how good or bad their latest chip is) if manufacturers and OEM's are too scared to stock their products. And as eddie just pointed out, if Intel do manage to put AMD out of business by illegal means, then expect the rate of development of their own chips to slow right down, while their prices shoot right up. With no viable competition they could do pretty much whatever they liked to increase their profitability.
Comment by J_Thames at 5:26pm 18th July 2008
It is in the intrest of everyone who buys a computer and who want to be able to have cheap affordable andfaster and faster cpus. Intel need to have it hammered home that there is no room in this market for behaving like they did years ago and are continueing to do now. They are now almost using predatory pricing in which they sell below all competitors that offer simmilar product (in power at stock settings). every time they can they lower prices. It was all fine and good when amd were winning years ago and intel were way behind because there was no question intel would be able to keep goinguntil they get a superior product out. but amd have no chance.
Comment by eddie543 at 3:08pm 18th July 2008
Why are you only picking up on that part of my arguement? YES I AGREE AMD ONCE MADE A VERY GOOD LINE OF CPU! So what? AMD choose not to wheel and deal with OEM's. That will probably be their downfall. Intel took the bull by the horns and have clearly reaped the rewards. Better product or not. The OEM's could have said no but they didn't. They could have done any deal with AMD but they decided Intel was the name they wanted branded on their products. It's only course languauge if you read the ** in that way. Don't talk down to me mate.
Comment by crazyceo at 3:29pm 18th July 2008
"Again my point here is that AMD cannot blame Intel for their bad show over the past 3 years" Nobody as far as I can see has attempted to blame Intel for AMDs bad position at present. This case is nothing to do with the market situation today, it concerns events at least 5 years ago. Why do you insist on arguing this point repeatedly when nobody is contradicting you on it? Also, please refrain from course language, it is not required.
Comment by NotFred at 2:34pm 18th July 2008
Yes you are right, the 'muscle' of a CPU is depentant upon two factors really, how fast it can go (what people usually measure muscle on) but also on what it does every clock cycle. For example if I have 2 processors 1 runs twice as fast as the other whilst the slower CPU can perform a given operation (like add/subtract etc...) on 4 times the amount of data per cycle, then obviously the second processor has more muscle on average. Obviously modern CPUs have many different types of instructions it needs to execute a given program therefore the difference between to CPUs is often not that clear cut. As regards the independance of the amount of data processed from the clock cycle speed, that isn;t quite true... because the clock speed dictates how much time a given unit has to compute a given instruction (i.e. T = 1/F) and everything has to be completed by the end of this period. If I have more data to process on the SAME hardware unit it will take longer and could violate this period therefore I must implement more hardware to process the extra data in time. This argument also works for increasing the cock speed i.e. same amount of data but with a smaller time period to process it. As an aside the best way to compare processor speeds is a metric known as CPI (clocks per instruction) which measures performance of the hardware irrespective of clock speed etc...
Comment by KoopaKingTurtle at 2:35pm 18th July 2008
Thanks for the explanation, I don't know how hard it would be to design a processor that issues 4 instructions rather than 3 per cycle; I'm not an expert :) but from what I understand, the instructions per cycle is a pure function and not an average of processor muscle. I think architecture efficiency is independent of this number, of course, if they can issue 4 instructions per cycle rather than 3, then it is more "efficient". Let's just see if AMD can achieve this magic number with their new AM3 socket.
Comment by Zhaoman at 2:22pm 18th July 2008
I think you miss the point entirely... Intel wined and dined the right people?!?!?! I think the point is (metaphorically) Intel took the 'right people' hijacked there car, kneecapped them and finally threatened their children if they didnt buy intel. What they are trying to say is that they used they advantagous position to close what should be a free market.
Comment by KoopaKingTurtle at 2:24pm 18th July 2008
Again my point here is that AMD cannot blame Intel for their bad show over the past 3 years. They've failed due to their complete lack of a business strategy. Are you saying just because they may have started this complaint when they were on top, we have to blame Intel for the $1.8 billion loss this year? The company lost money in 9 out of last 15 years. This will go on and on but don't go on the defensive because AMD didn't wine and dine the right people, Intel did! Intel put their money were their mouth is, AMD didn't want to. We're all in it for the money whether you like it or not. Being a nice fluffy bunny, being kind to the environment and against capitalism is choice for everyone. That wont put food on your table, just ask the investors of AMD which one they'd prefer to be today.
Comment by crazyceo at 2:22pm 18th July 2008
I fully believe that companies of the size of Microsoft and Intel have got where they are with the aid of anti-competitive practices. When you have such awesome financial muscle (no doubt far more than Compaq, Gateway and AMD combined) it must be fairly easy to strongarm these smaller OEM companies - which leaves us with a crippled set of competitors for Intel in the form of the weakened AMD and near-invisible VIA ... and when did anyone last bother trying to bring out a commercial x86 operating system that would try and step on Microsoft's toes....?!
Comment by v00d00 at 1:59pm 18th July 2008
The amount of completed instructions per second is surely a pure function of the CPU cache... I meant to say
Comment by KoopaKingTurtle at 1:22pm 18th July 2008
Some people seem obsessed about making this subject about preferring AMD over Intel or visa-versa. As NotFred has pointed out, that is entirely beside the point. A large and powerful manufacturer has either bribed or threatened companies (or often both) not to deal with it's smaller and less power competitor. That is illegal. It is illegal in this country, it is illegal throughout Europe and America - and pretty much illegal in most of the world.
Comment by J_Thames at 1:06pm 18th July 2008
I think you might be wrong about the clocks per instruction/performace. The amount of completed instructions per cycle is surely a pure function of the CPU cache segrigation(in terms of fetch/decode/execute etc...) combined with the time it takes for the longest stage to complete its given operation. Therefore if an intel chip performs four instructions every cycle and the AMD only three it is by far and away more efficent. BTW the execution of four instructions per cycle is psuedo as in actuallaty the pipeline operates on all four instructions at THE SAME TIME!!! If AMD wanted to move from 3 instructions to 4 a MASSIVE (almost complete) redesign is necessary as the hardware must be able to cope with the extra instruction every cycle which quite obviously they are not able to at the moment.
Comment by KoopaKingTurtle at 1:17pm 18th July 2008
AMD started these proceedings when they WERE in a much stronger position... they have been going on for a very long time.
Comment by NewParadigm at 1:15pm 18th July 2008
to know what time period these anti-competitive measures were taken in. If it was the period when AMD processors were the better choice over Intel then it means different things to if it was done later on when the core architectuire came out. If done when AMD were ahead it might have reduced there profits enough to slow their R&D program, meaning they couldnt develop chips to stay ahead of the game. If this was the case though, the sums of money would have had to be massive to stop other companies just saying "ok, we'll use AMD's cpu's if we can't have intel's without an exclusive deal." If done 'post core' then you can see why manufacturers would be so keen to make sure they could use Intel's cpu's (given Intel much more leverage). This is probably the worse of the two cases as it would mean Intel were using their dominant position in the market (in terms of performance and money) to further widen the gap between itself and it's nearest competitor. Otherwise it would have been Intel using their larger amounts of cash reserve to try and catch up with AMD, narrowing the gap in the competition (performance wise anyway).
Comment by NewParadigm at 11:36am 18th July 2008
Twice now you have completely ignored the fact that this case stems from a time when AMD had a vastly superior product to Intel, and the complain was filed at that time. These cases just take a long time to resolve. Or are you claiming that NetBurst was the best architecture available at the time?
Comment by NotFred at 12:55pm 18th July 2008
Calm down Crazy dot start crying on us!! - - - On a more serious note, AMDs new CEO (Dirk meyer) might actually make a difference to the way AMD are doing things right now - - - Intels CEO is more buisness man, but AMDs new CEO was actually an engineer, which may benefit us in a greater way.
Comment by NikoBellic at 12:23pm 18th July 2008
If AMD were in a stronger position than they are today, do you really think they would have made this complaint against Intel? I don't think so. Again, the statements from Gateway, Compaq and AMD claiming Knee-capping is a one sided whine from a company that needs to look inside to correct it's problems. To say their performance isn't related is just wrong. The companies who "Had a gun to their heads!" could have said no and gone to AMD. They didn't because of the inferior product. They choose Intel because they knew they would make money off it. It's business, not a pi$$ing contest.
Comment by crazyceo at 12:23pm 18th July 2008
Intel's hatchback has nitrous injected. I think Intel is fully aware that AMD could do the same to their more efficient sports car and that's why Intel are being so competitive at the moment.
Comment by Zhaoman at 12:12pm 18th July 2008
AMD has the best technology, but intel has pushed their technology much further. ie. AMD has a fast sports car, but intel has made a hatchback that will go faster
Comment by Cogwulf at 11:52am 18th July 2008
On a big sidetrack from the topic, (just had to get this out of my system :D); many people would believe that Intel have an unsurmountable lead over AMD in terms of processor power and research (simply look at the benchmarks). But I would argue that AMD are far from out of it: the new Phenom range was lacklustre and ineffective in terms of performance, but a look into the specs reveal that Phenoms issue 3 instructions per cycle while Core 2s can issue 4. This means that if all other design aspects are equal, then an equivalently clocked Core 2 should be 33% faster than a Phenom. Interestingly this is not the case as Core 2s are only 10% faster than the same clocked Phenom. Could this mean that Phenoms actually have a far more efficient core architecture than a Core 2? And what if AMD increased the instructions per cycle to 4? Phenoms would infact perform 25% better than Core 2s, and the Phenom 9850 would rival a Quad 9650 in terms of performance. I think Intel is fully aware of this fact and that is why they have been releasing more and more competitive CPUs because they know that if AMD pull up their trousers even a little bit, the next AM3 socket could become a performance champion again. You heard it here first folks!
Comment by Zhaoman at 11:28am 18th July 2008
Nobody has said this case has any relevance, or is an excuse for, AMDs poor performance in the present CPU market. AMD may well have given manufacturers free CPUs in the past, this is not a problem. The problem was Intel linking these free or discounted CPUs to the manufacturers’ behaviour towards the competition, i.e. not buying AMD chips. “Use our chips, we give them to you cheap” is fine. “Use only our chips and we will give them to you cheap” is anti-competitive. Can we see the difference there? Regarding the comments by Compaq, they could not do such deals with AMD as AMD did not offer the same ‘all or nothing’ rebates Intel did. Have you read the cited document? Pages 15 onwards are certainly rather incriminating.
Comment by NotFred at 11:39am 18th July 2008
Are AMD saying they have never given a manufacturer free CPU's for particular models that they would have ordinarily paid for? It's purely a business strategy, nothing more. The comment off Compaq and the like is just a defence to divert the question of why they did the deal with Intel instead of AMD. I'm sorry but I have to say AMD's troubles are not the fault of Intel's business practices. It's their own lack of professional management and pricing policy. Just look at the Phenom range at the moment. Completely overpriced and underperforming. Quoting that they used to have a good product just doesn't cut it. It wasn't Intel's fault their product range hasn't done well for over 3 years now. As consumers we demand the best performance for the lowerest cost. AMD have not offered any alternative to Intel CPU's based on price and performance. If they did, we would all buy them or buy products using their CPU's.
Comment by crazyceo at 11:13am 18th July 2008
Yes, because offering discounts to OEMs condition to them only using your products amounts to the same thing as paying people not to buy from your competitors. It is highly anti competitive behaviour and should be punished accordingly. [Also, someone is bound to come in and say "lolz, but AMD can’t make good CPUs anyway". In pre-emptive answer this case concerns the P3/4 vs Athlon xp/64 era, when AMD had a clear performance advantage. Hopefully people will read this first and we can stop this degenerating into AMD bashing... We live in hope....]
Comment by NotFred at 10:51am 18th July 2008
I dont understand all this stuff, Is intel being punished because they tried to get exclusive deals and offered discounts on there products?
Comment by VadimWolf at 10:49am 18th July 2008
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