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EU slaps a record fine on Intel

What do Standard Oil, AT&T and Intel have in common?

None of them were monopolies, but the government treated them as such.

Standard oil used unfair business practices to achieve its near monopoly. This included murder, extortion and blackmail and good old fashioned beat the crap out of people.

AT&T was huge and a near monopoly too. You cant deny that. At the time it was one of the biggest companies in market share and price in the world. Now I can agree the splitting up of AT&T was a waste of time, because instead of one big company now you have regional monopolies that have put the US back in the telecommunications world. Lack of competitors and lack of willingness to do anything about it has put the US in certain areas no better than an up and coming telecommunication nations in Europe and the 3rd world.

Intel is a near monopoly too. No matter how you slice or dice it, Intel can trounce its very few competitors if it wanted to. When you sit on 70%+ of the market then you in reality own that market up to a degree. And if the company in question is not watched like a hawk for exploiting this massive market advantage in an anti competitive way then the company will do so.. we have seen it before and will see it again. And for the record, I am an Intel man because they have the superior product (for now).

Monopolies or near monopolies are in no ones interest regardless if it is an EU company, Japanese company or an American company. But I guess the nationalistic cloud of stupidity triumphs over logic and common sense yet again.
 
Standard oil used unfair business practices to achieve its near monopoly. This included murder, extortion and blackmail and good old fashioned beat the crap out of people.

AT&T was huge and a near monopoly too. You cant deny that. At the time it was one of the biggest companies in market share and price in the world. Now I can agree the splitting up of AT&T was a waste of time, because instead of one big company now you have regional monopolies that have put the US back in the telecommunications world. Lack of competitors and lack of willingness to do anything about it has put the US in certain areas no better than an up and coming telecommunication nations in Europe and the 3rd world.

Intel is a near monopoly too. No matter how you slice or dice it, Intel can trounce its very few competitors if it wanted to. When you sit on 70%+ of the market then you in reality own that market up to a degree. And if the company in question is not watched like a hawk for exploiting this massive market advantage in an anti competitive way then the company will do so.. we have seen it before and will see it again. And for the record, I am an Intel man because they have the superior product (for now).

Monopolies or near monopolies are in no ones interest regardless if it is an EU company, Japanese company or an American company. But I guess the nationalistic cloud of stupidity triumphs over logic and common sense yet again.

:rofl Okay, your typical emotional hysterics aside, I assume then that you seem to have NO issue with Government monopolies; is that right? :rofl
 
Economic policy needs to be a science, not a religious belief. How one could think it is better for the market to remove all competition using strongarm tactics boggles the mind. History tells us what happens when Intel doesn't have any good competition. They rationally seek to maximize profits by abusing the fact that they control supply without competition. How exactly is that good for the consumer? How is it good for capitalism to remove the basic principles of competition?

Thinking that large corporations won't exploit the power given to them is just as naive as the communists views on what government does with similar powers.
 
Which of the above would be legal/illegal if you decided the rules in a capatilistic market? Why?

Paying distribution companies and retailers money so they delay the release of a competitors product.

Paying a company money to not sell a competitors product.

Paying a supplier money to inflate the price or deny components to a competitor.

Collaborating with a competitor to fix prices.

Lowering prices below profitable levels to force less sustainable competitors out of the market.

Thanks for adding some substance to this thread.
 
Did anyone besides Scourge and Harry actually read the article?

Clearly, Mr. V did not.

The Commission found that between 2002 and 2007, Intel had paid manufacturers and a retailer to favour its chips over those of Advanced Micro Devices (AMD).

That is by definition a kickback.

I pay you money so you buy my products. And you go to jail for that in the US and/or pay hefty fines.

The fine may be a bit high, but I see no reason to complain about the EU's actions over a clearly illegal and anti-competitive action by Intel.
 
Also, the fines are not actually high at all. The problem with fining a corporation is that unless the fine hurts their bottom line, they have no incentive to change their behavior. If you can make 10 million breaking the law and only get fined 1 million, what is the incentive to follow the law? Fines either need to high enough to punish those who break the law, or your need to start revoking corporate charters and throwing people in jail. You cannot deter someone from a crime if they can ignore the punishment.
 
Although at times I do think that if AMD is the better of the two then they will eventually prevail.

I like AMD because you get similar power without the Intel cost.

Pretty much. AMD offers for I'd venture 90% of people the raw processing power they need but at half the cost if not more. I don't know anyone who actually uses the full extent of a 775 pin Quad Core. But they pay for it though the nose when they could have gotten a Quad Core from AMD or even a Triple Core for much, much, much less. I have Intel stock, but AMD is a much better value for most users. Not for those running Crysis at 70 FPS, but most folks.
 
Pretty much. AMD offers for I'd venture 90% of people the raw processing power they need but at half the cost if not more. I don't know anyone who actually uses the full extent of a 775 pin Quad Core. But they pay for it though the nose when they could have gotten a Quad Core from AMD or even a Triple Core for much, much, much less. I have Intel stock, but AMD is a much better value for most users. Not for those running Crysis at 70 FPS, but most folks.

I'm going to run a phenom quad core as soon as I get the money to put it together.

I've usually end up running my pc's to the max pretty regularly. Lots of graphic games etc.
 
Pretty much. AMD offers for I'd venture 90% of people the raw processing power they need but at half the cost if not more. I don't know anyone who actually uses the full extent of a 775 pin Quad Core. But they pay for it though the nose when they could have gotten a Quad Core from AMD or even a Triple Core for much, much, much less. I have Intel stock, but AMD is a much better value for most users. Not for those running Crysis at 70 FPS, but most folks.

AMD was behind, very far behind Intel technology wise for a very long while.. ever since the Core 2 Duo came out really. This performance difference Intel wisely used in its advertising and promotion, and was perfectly legal. The only thing AMD had going for it self was price and for a long while AMD was 15 to 30% cheaper (at least here). However since Intel launched its 7xxx series that price gap has come down considerably. It was one of the reasons I went with Intel over AMD at my last purchase. But the most important thing was power consumption and heat from the chip. My new Intel chip's price difference was made up quite fast in the lower power consumption plus I wont have to worry as much as I did over the heat the chip gives off during the hot summer months. Plus to get the same preformance from my new dual core chip in an AMD, then I would have to buy a quad core and then the price would be equal... so..

But saying that, I truly believe that if AMD can continue with its policy of making newer chips work in older chip sets and other facets of its business model, that it will slowly take more and more business away from Intel, because it is a very sound model that people understand when they figure it out. Actually took me quite a while to understand the whole AM2 and AM2+ system and now the AM3 stuff. They should really plaster this all over the freaking place and slap Intel in the face with it... because it is a brilliant system.

Like it or not Intel's business model regarding backwards compatibility is non existent when they go to a new platform and that is frankly from a consumers view point a brain dead idea. The only thing that has been in Intel's favour on this front is the fact they have changed platforms less than AMD for now.

When the time comes again to get new hardware in a few years, then I will again be torn between the 2 and probably again take months to decide a simple 10 min purchase :)

But that still does not mean that Intel should be allowed to get away with their unfair business practices. And it aint the EU only going after them.. Japan, South Korea and even the good old USA are after them for exactly the same thing.
 
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The EU press release is worth reading in this case. In particular one part jumped out at me

Source [Europa.eu | Antitrust: Commission imposes fine of €1.06 bn on Intel for abuse of dominant position; orders Intel to cease illegal practices]

For example, rival chip manufacturer AMD offered one million free CPUs to one particular computer manufacturer. If the computer manufacturer had accepted all of these, it would have lost Intel's rebate on its many millions of remaining CPU purchases, and would have been worse off overall simply for having accepted this highly competitive offer. In the end, the computer manufacturer took only 160,000 CPUs for free.
 
It's nice to see corporations being held responsible and hit hard when they break the law. I'm tired of seeing them get a slap on the wrist in other parts of the world, or getting handouts when their businesses start to tank.
 
Also, the fines are not actually high at all. The problem with fining a corporation is that unless the fine hurts their bottom line, they have no incentive to change their behavior. If you can make 10 million breaking the law and only get fined 1 million, what is the incentive to follow the law? Fines either need to high enough to punish those who break the law, or your need to start revoking corporate charters and throwing people in jail. You cannot deter someone from a crime if they can ignore the punishment.

Exactly! Ya gotta hit 'em hard!
 
I pay you money so you buy my products. And you go to jail for that in the US and/or pay hefty fines.
I don't think that is illegal as long as it doesn't create a monopoly. From what I've heard anti-trust laws are vague: you can't "unreasonably exclude firms from the market or significantly impair their ability to compete".
 
I don't think that is illegal as long as it doesn't create a monopoly.

I don't know about that. Firms and people get fined and go to jail for engaging in kickbacks. Many mafia are in jail partially because DAs could prove that they engaged in illegal kickbacks. While that is this side of the pond, I don't see why something like that wouldn't exist in similar law in Europe.

From what I've heard anti-trust laws are vague: you can't "unreasonably exclude firms from the market or significantly impair their ability to compete".

I guess so, but given how the article is worded, what Intel did was a kick back. Even if it did not hamper competition, defending their actions is pretty ridiculous. I don't see why if as a country we proclaim it to be illegal for people to do it why companies engaging in it is any better.
 
I don't know about that. Firms and people get fined and go to jail for engaging in kickbacks. Many mafia are in jail partially because DAs could prove that they engaged in illegal kickbacks.
Getting kickbacks from the government is different then defining terms of purchase or sale between companies. The typical use of "kickback" is one when a person is bribed with individual compensation, not an entire company.

For example, plastic molding companies won't make you a design unless you order a specific amount. Though you can order less, the more you order provides significantly cheaper prices per product. Technically this would qualify as a "kickback" but its normal business practice as its expensive to produce a mold and inexpensive to produce the product once the mold is created. Therefore, the plastic company will charge less per product if a customer orders a greater bulk.

This type of business dealing is pretty universal. Its cheaper to make in bulk then to custom make orders or have an unsteady demand. But smaller companies can view this as unfair.

I guess so, but given how the article is worded, what Intel did was a kick back. Even if it did not hamper competition, defending their actions is pretty ridiculous. I don't see why if as a country we proclaim it to be illegal for people to do it why companies engaging in it is any better.
The real problem is that many necessary business practices can have the impression of unfair practice. No doubt many companies use this to their advantage.

Though some of the things Intel purportedly did cannot be justified and it is probably why they are being so heavily fined.
 
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