$1.4bn EU Fine On Intel Upheld

 

Intel’s appeal against its 2009 $1.44 billion fine for anti-competitive practices has been dismissed ‘in its entirety’ by the General Court of the EU.

“Intel granted rebates to four major computer manufacturers (Dell, Lenovo, HP and NEC) on the condition that they purchased from Intel all or almost all of their x86 CPUs. Similarly, Intel awarded payments to Media-Saturn (a PC retailer) which were conditioned on its selling exclusively computers containing Intel’s x86 CPUs,” says the judgment.

In Dell’s case, Intel got nearly 15% of the PC market in one deal. “Dell’s market share was 14.58% in the first quarter of 2003 and increased to 16.34% in the fourth quarter of 2005,” says the court, “given that Intel granted rebates to Dell on condition that Dell purchase all its x86 CPU requirements from it, that means that between 2003 and 2005 Intel had already foreclosed between 14.58% and 16.34% of the market solely by the rebates granted to Dell.”

The judgment goes on to say: “Intel awarded three computer manufacturers (HP, Acer and Lenovo) payments which were conditional upon their postponing or cancelling the launch of AMD CPU-based products and/or putting restrictions on the distribution of those products.”

“First, HP was to direct HP’s AMD-based x86 CPU corporate desktops to small and medium-sized business (SMB) and Government, Educational and Medical (‘GEM’) customers rather than to enterprise business customers;

“Second, HP was to preclude its channel partners from stocking HP’s AMD-based x86 CPU corporate desktops so that such desktops would only be available to customers by ordering them from HP either directly or via HP channel partners acting as sales agent;

“Third, Acer, HP and Lenovo were to delay or cancel the launch of computers equipped with AMD CPUs.”

As to the size of the fine, the court decided: “None one of the arguments raised by Intel supports the conclusion that the fine imposed is disproportionate.”

Japan and Korea have also found Intel guilty of anti-competitive behaviour.

When the Americans decided to look at Intel’s anti-competitive practices, the FTC chairman Jon Leibowitz, Chairman of the FTC, declared: “We believe Intel stepped well over the line of aggressive competition on the merits, and engaged in unfair, deceptive and anti-competitive conduct. The sum total of all this anti-competitive conduct unfairly prevented companies from competing, bolstered Intel’s monopoly, and harmed consumers by stunting innovation, diminishing quality, and keeping prices higher than they would otherwise be.”

Intel can appeal to the EU’s highest court the Court of Justice but only on points of law.

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15 Comments

  1. david manners
    June 18, 2014 12:40

    well thank you grax for that statement of faith in our ability to make a change. I’d love to help change this Euro-drift in high-tech. Maybe, just maybe, the ELG will come up with a reasonable plan at the end of this month. clearly the politicians have the money and will to do this and the FD-SOI project is one plank of a platform to revive European electronics. A server project and a secured Euro-cloud (if such a thing is possible) would be another. The snag is always, as you say, the top Euro- management. maybe setting up new companies, recruiting the best engineers in the world to work in them, and letting the existing Euro-Dinosaurs go bust is the best approach. The French government may be beginning to think that way

  2. grax
    June 18, 2014 09:31

    @Mike

    I received the slides, thank you. I will send you mine regarding an previous project of a (big) server processor I was working with STM management during 2012-2013 and abandoned due to Italian STM management blocking decision.
    Believe me, the problem of launching new project inside STM is POLITICAL not simply business and surely not technological !!

    @David, Mike

    I know you both since several years, YOUR REPUTATION is VERY HIGH especially inside European top management community.
    I know a lot of decision makers in our industry who follows your blog and your presentations.
    I am sure that TOGETHER YOU HAVE THE POWER to trigger a discussion on the future of this industry putting EU officers and Semicon managers AROUND A TABLE in order to DEFINE A TANGIBLE STRATEGY, a REAL PROJECT TO RELAUNCH our industry in Europe which means FAST and SMART PLAN lasting no more than 2~3 years focusing on WELL DEFINED PRODUCT, for a WELL DEFINED Class of Application, for a WELL DEFINED end customer.
    MONEY IS NOT A PROBLEM if the project is SERIOUS and the proposed technology IN TIME with competitors; you know this better then me.

    A Secured European Cloud is a HUGE opportunity especially after the Snowden affair …. LET’s EXPLOIT THIS OPPORTUNITY !!

    I really believe that few European NEWCO can start focusing on server technologies for Cloud; such newco will collect the best engineers we have in Europe and UK and fit with Nellie Kroes vision of Semiconductor airbus which has not to be founded by POLITICIANs but just SUPPORTED by european institutional market on its beginning.

    I hope to have the chance to discuss with you on such subject I have been working on in last 3 years.

  3. Mike Bryant
    June 18, 2014 01:27

    @Grax

    On the cloud issue, this was identified as a European priority even before Snowden. There are some submissions for projects in this field in Horizon 2020 but the ones I am aware of to date are somewhat poor, though I don’t see all of them by any means.

    The delay in establishing ECSEL didn’t help the hardware side of things (the software guys just got on with it as though it was approved) and we are still waiting for the first brokerage event when a good project team could be formed. I think merging ST’s server with their related network processors could create something innovative at a higher margin/lower volume which would suit production at Crolles.

  4. Mike Bryant
    June 18, 2014 01:16

    Hi Grax

    We are waiting for the next ELG report and will do something once it is published. In the meantime I have sent you the slideset I presented after the last one which you will see cuts to the core on what is required.

    Mike

  5. david manners
    June 17, 2014 21:42

    That, grad,
    is a brilliant idea. I think you’ve put your finger precisely on where Europe could exert maximum leverage on the industry. Now it’s a case of how to go about getting this underway. Food for thought.

  6. grax
    June 17, 2014 15:48

    I fully agree with you David; EU commission should provide a market TARGET for industry to move, and invitation of tender of 100M would shake things (?)

    Which domain?
    The best domain to start are SERVER powering future European Institutional Cloud which requires customised secured solutions, the sole sector where EU has produced sort of proprietary technology in last decades.

    STM has developed a “test” project of 16cores ARM A57 (64bit) with 16M L3$, 4 mem channels DDR3, die size 3cm(2) ; but such project has been abandoned cause the ITALIANS of STM didn’t want to invest 20M cash … and there was no support on French side neither (after STE failure they are SCARED)

    Mike is totally right, after the failure of STE, TI, Freescale, the mobile market is GONE and STB project will not be a solution cause they are relatively low-tech targeting mostly low-cost.
    The NEW digital wave in Europe can start ONLY if BIG project would start targeting BIG MARKET.
    Believe me, SERVER PROCESSORS are by far the best candidate and ARMv8 roadmap does provide a QUICK start … it is JUST A QUESTION OF RD BUDGET and nothing else.

    >>>>>>>>>>>>> Mike, David,
    why not organizing a cycle of CONFERENCES on the future of Digital industry in Europe??
    You are absolutely optimally positioned to do that and SOMEBODY HAS TO DO THAT cause neither the industry, nor the EU Commission is doing ANYTHING and the digital industry is ABOUT TO DIE in Europe !!

    I would be more then happy to help the.grax@gmail.com

  7. Mike Bryant
    June 13, 2014 15:52

    I know exactly what they have in FD-SOI, and the market size for each of the products. It’s simply nowhere near enough for a new digital beginning for Europe. Qualcomm probably sells more of each of its designs that this lot together.

  8. david manners
    June 13, 2014 10:57

    ST has now got 17 commercial ICs designed in FD-SOI three of them ASSPs and 14 of them ASICs, Mike, the first FD-SOI products include a high-complexity, low-power, low volume ASIC for networking, a high volume consumer ASIC, the Novar-Thor integrated apps processor and modem which is being sold by ST not for handsets but for other mobile applications, and an FD-SOI DSP is in the pipeline.

  9. Mike Bryant
    June 13, 2014 09:55

    So what are these digital markets Europe is going to address with FD-SOI David ? It can’t be mobile phones as the volumes needed mean you can only use TSMC or Samsung. And if you really want to use FD-SOI Samsung can now offer it.

    STB, TV and many other ICs for entertainment products are mains powered so need the lowest price, not power consumption so that kills of FD-SOI.

    And everything else I can think of pales into insignificance in volumes.

    And please don’t mention IoT or I really will believe the booze has got to you !! :-)

  10. david manners
    June 13, 2014 09:10

    One other thing, grax, I wouldn’t agree that digital is dead in Europe while we have FD-SOI being brought up to address consumer digital markets.

  11. david manners
    June 13, 2014 08:53

    Well grax I agree the ELG is not the best group to decide the future of microelectronics in Europe, but if you’re trying to get something done, it’s best to give the industry leaders a target and tell them to produce a plan to achieve it. Doing it that way means the industrialists have to buy into the target. It’s a way politicians can persuade industrialists to do things they otherwise wouldn’t do.

  12. grax
    June 12, 2014 17:20

    last point … ELG is exactly the worst way to go.

    Europe Commission fist mission should NOT BE the ELG but SIMPLY ORGANIZE and FOSTER VENTURE CAPITAL investment in Europe (which is ABSOLUTELY ABSENT!!) who has to invest in STARTUP with the mssion to develop market VISIONs and new PRODUCTS.

    NVIDIA, MARVEL, MICRON are 20y old COMPANIES !!!!

    Semicon factories will have the role to PRODUCE and wide scale and VC must FINANCE such process …

    Public Founding have to finance BASIC research only such as the future revolution of Graphene … always on a MERIT BASE and with “a bit of” BUSINESS VISION cause University must have the possibility to earn out of their discoveries.

    POLITICIAN dont know what to do … Mme Kroess is a nice lady but with no clue.

    We need somebody PROMOTING A DISCUSSION at EU level; We need a NEW STARTEGY for a REVOLUTIONARY START based on the principle of TRUE COMPETION, MERIT, SYNERGIES, TRANSEUROPEAN COOPERATION both technically and financially.

  13. grax
    June 12, 2014 17:05

    dear David, I (un)fortunately happened to know the EU semicon system very well. When you understand “how it works” there is really NO surprise that EU semicon industry is about to fail in a period of HUGE OPPORTUNITIES in the ICT domain (new server processors and memory archi, new storage technos, new Xconnect).

    Digital in European Industry is simply DEAD! only industry surviving cause they cover nice market with MEMs, Analog, Automotive low tech and bit of BTS for local customers (till when??)
    Big digital market ARE GONE … forever!! Estimation says that a project will cost around 1 USD per MOS, say 100M average of cash to launch a server processor … Which EU company has the CAPABILITY to launch such project using ITS OWN FOUNDs with NSTE market analysts checking their budget and asking to REDUCE engineering COSTs??

    A GOOD CEO is not the one AVOIDING any risk -but- ACCEPTING the challenge by OPTIMISING risk factors agaist market benefits !!!

    Where are such CEOs in Europe capable to TAKE the challenge and ASSUME THE RISKs on their own??
    They just want to SAVE their position and future pension … they DONT CARE about the FUTURE of the European industry.

    Horizon 2020 is an opportunity to relaunch European semicon industry for next decade… but I KNOW that STM, Infineon and NXP will get biggest STAKES of PUBLIC financing and that they will use such PUBBLIC FOUNDs mostly to cover the LOSSES of old project where they have lost cash and SAVE “the back” of incompetent managers (who cannot be and never will be fired !!)

    IT IS A FRAUD !! nobody enquire on HOW THIS MONEY IS REALLY USED for EU projects !!

    In recent past before the Horizon 2020 program where finally edited, “somebody” of EU commission tried to introduce the idea that startup should be a main focus which was not the case in previous FP7, Catrene, Eniac programs …. As reaction, there was a JOINT letter SIGNED by ministry of industry of France AND ministry of industry in Germany addressed to the EU commission expressing their firm opposition on this “new” formulas saying that Large Enterprises already finance and foster startup development … WHICH IS ABSOLUTELY FALSE !!

    For the EU industry to start back again ….. WE NEED MERIT !! WE NEED TRUE COMPETITION !! WE NEED YOUNG TALENTED ENGINEERS coming from all the planet (including USA) and EU has to PROMOTE COMPETITION INSIDE Europe including startup AGAINST old eu-companies such as STM, Infineon, Siemens, NXP, Philips, Bull, Ericsson who got HUGE amount of PUBBLIC financing with POOR, MEDIOCRE, ZERO results !!! such company use Public money TO COVER their own looses and financing “research” project who NEVER produced a PRODUCT in last 20yrs !!

    NOBODY check this HUGE fraud in Europe cause EU politician want to PROTECT their local “companies” even thought they are managed by a group of MEDIOCRE managers with high salaries!!

    We DONT NEED to get 1Billion bill filed to Intel using couple of nice judges making their job every 5years … WE NEED TO BUILD NEWCOs in Europe, employing WW top engineers, managers, techno visionaires capable to COMPETE and FIGHT AGAINST INTEL, HP, DELL, NVIDIA, MARVELL, IBM, MICRON and Samsung by producing COMPETITIVE TECHNOLOGIES !!

    We IMPORT SEVERAL HUNDRED BILLIONs semiconductors products !!! and have all capabilities to DESING and PRODUCE THEM IN EUROPE !!

    STM, Infineon, NXP are lead by old managers (60y average) who will NEVER be capable to QUICKLY change their internal politcy and “culture” to ACCEPT the challenge of future ICT techno and markets.

    Only startup, lead by new generation 30-40 can accept this challenge, have the right vision, dreams and THE HUNGHER OF SUCCESS !!

    David, perhaps only you journalists could help this cause by starting an information campaign to denounce such SCANDAL and try to open the discussion at POLITICAL level on the NEED to FOSTER TRUE competition in Europe and STRUCTURE and ORGANIZE the Venture Capital cluster (another huge subject)… cause otherwise EU industry will never be capable to reform itself so that in next decades all activities will be closed and only low-engineering project will be developed in EU.

    regards

  14. david manners
    June 12, 2014 14:11

    Yes grax I hear that the ELG report due out at the end of this month will betray Neelie Kroes’ ambition of Europe getting 20% world market share in semis and that this is because the European semi leaders won’t support it. And you’re right if the leaders of the big companies won’t support it, Kroes should direct her funding to those who will – SMEs, start-ups, R&D organisations, equipment and materials companies. It should go to the brightest and best not to the old, tired and timid.

  15. grax
    June 12, 2014 13:27

    this is sooooo ridiculous !!!

    Intel is dominating the CPU market since PC has been invented; the EU ICT depends COMPLETELY on Intel products.
    All Cloud dc and ANY HPC machine is based on Intel products.
    We IMPORT simply EVERYTHING, the sole europena HPC producer Bull has tight relation with Intel; all others are AMERICANS.

    STM, Infineon, NXP are UNCAPABLE to cooperate to build the EU Digital Agenda (several Billions EUR worth in next years) even if -today- ARM can provide strong 64bit cores (ARMv8) capable to power future ICT infrastructures.

    Fab in Germany and in France are not producing competitive technologies for future decades.

    No general manager from STM, Infineon or NXP HAS BEEN FIRED for this HUGE FAILURE in EU semicon industry DISASTER ….

    What is the answer of European politician?

    CLOSING the eyes and file Intel for “unloyal” competition practices ??? … during a trial lasted 5 years ??? is this an ANSWER to the REAL problem??

    At least USE this money to RESPIN EU semicon industry by creating a ECHOSYSTEM where startup can launch REAL project… I hope this money wont feed (fraudulent) Catrene, Eniac joint research projects … who are easy money for a closed group of (mafia) friends.

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