EU fines Intel billion-plus

I've posted several times previously (most recently here) about the legal battles between Intel and AMD, and the related battles between Intel and various regulators (Korea, Japan, EU). Last June, Korea fined Intel $25 million for offering improper rebates to customers:

Intel offered about $37 million in rebates over 2 1/2 years to Samsung and Trigem on the condition that they wouldn't buy from Advanced Micro, according to commission's statement.

The EU has just handed down a fine that makes Korea's look like chump change:

The European Union fined Intel Corp. a record euro1.06 billion ($1.44 billion) on Wednesday, ordering the world's biggest computer chip maker to stop illegal sales tactics that shut out its Silicon Valley rival AMD.

The findings are detailed in the article linked, and are too lengthy to quote here, but they are similar to the Korean case:

Wrapping up an eight-year probe, the EU says Intel gave rebates to manufacturers Acer, Dell, HP, Lenovo and NEC for buying all or almost all their x86 computer processing units, or CPUs, from Intel and paid them to stop or delay the launch of personal computers based on AMD chips.

Intel has denied the validity of the findings and says they will appeal within the next sixty days.

I have no knowledge of who is right or wrong in this case, but obviously a fine of this size indicates the importance of reviewing your trade promotion policies carefully. For American readers who will try to draw solace from the fact that the fines have been overseas, I draw your attention to this part of the article:

[EU Competition Commissioner] Kroes said she hoped the administration of President Barack Obama would join Europe in subjecting corporations to closer anti-trust scrutiny.

This week, one of America's top antitrust officials, Christine Varney, signaled a return to tougher enforcement as the Obama administration dropped a strict interpretation of antitrust rules that saw regulators shun major action against monopolies over the last eight years.

Kroes said Varney's words gave her hope that current "close cooperation" and information exchanges with the Federal Trade Commission "could go in a very positive way" in the future.

"The more competition authorities are joining us in our philosophy, the better it is for it is a global world," she said. "The more who are doing the job ... and with the same approach then the better it is."

Part of AMD's suit against Intel dismissed

A federal judge this week dismissed an important part of Advanced Micro Device's antitrust lawsuit against Intel. AMD has sued Intel for, among other things, using rebates to coerce customers into buying exclusively from Intel. Similar charges have been brought against Intel in other countries, including Japan, Korea, and the EU. AMD wished to use foreign activities as part of their case in the US, but the judge ruled against them.

Farnan [concluded] that he lacked jurisdiction over AMD's claims based on conduct and harm that took place outside the United States.

"AMD has not demonstrated that the alleged foreign conduct of Intel has direct, substantial and foreseeable effects in the United States which gives rise to its claim," Farnan wrote in an 18-page opinion.

At best, he said AMD's allegations described activity that might have had "ripple effects" in the United States, but not enough to give rise to an antitrust claim.

The case will go to trial in 2009. No kidding -- 2009.

EU takes on German Intel case

The EU has taken over Germany's investigation of Intel for anti-competitive practices. We reported on this in July.

Germany's antitrust agency, Bundeskartellamt, received a complaint from AMD alleging that Intel had abused its dominant market position by putting pressure on major electronics retailer Media Markt to not sell AMD's chips. Because the Commission found similarities with its existing probe into Intel, it took over the German investigation in late August, Commission spokesman Jonathan Todd said.

AMD has pressed similar charges with the trade commissions in Japan and Korea, in addition to filing a private action against Intel in the US.

Other countries have weighed in with their own investigations into Intel's business practices. Earlier this year, the Korean Fair Trade Commission sought more documents from Intel relating to its antitrust investigation into the chip giant.

And last year, Intel agreed to abide by recommendations from the Japan Fair Trade Commission, which had launched its own probe. The recommendations called for Intel to halt its practice of requiring PC makers to restrict the use of competitors' chips in exchange for monetary rebates. Intel accepted the recommendations but disagreed with the facts underlying the allegations.

We'll continue to monitor this closely, because the issues are important ones.

AMD v. Intel -- this time in Germany

Advanced Micro Devices, which has already sued Intel in the US, and has pushed authorities to act against their rival in Japan, Korea, and the EU, has now sued in Germany.

The latest complaint was filed last week with Germany's Federal Cartel Office .... In it, AMD claims that Intel made deals with German retailers that violate the country's competition laws.

The complaint was prompted by a report in the German edition of the Financial Times claiming that the Media Markt retail electronics chain had agreed to only sell computers that used Intel's processors in return for a payment from the chipmaker.

"AMD had already received similar information, so we decided to file a formal complaint with the Federal Cartel Office," AMD spokeswoman Hollis Krym explained.