Intel begins appeal against $1.3 billion European fine

7/3/2012 3:33 PM EDT

As I recall the saga: Intel was making parts. Doing well. Large customers - government types liked what they saw and were getting but was nervous on single source. Intel and AMD entered and Intel shared the design. AMD pulled some stunts and finally was expelled. Both were making parts. Then on more than one occasion, Intel's design started showing up at AMD. The last was most strange - not only sneaking out but then emailing the code to AMD from the INTEL design center in Silicon Valley. That one made the papers big time. AMD began to strike back by buying vendors in the US. INTEL simply did the same with several suppliers in Europe. The volume was coming out of the Bay area and Texas at the time. That is how my dusty brain recalls.

7/4/2012 9:21 AM EDT

buying vendors?

If you mean discounting or giving marketing subsidies, it is a question of how that is done and whether it interferes with dompetition by damages the interests of consumers.

7/4/2012 10:51 AM EDT

Well if that is the way we can get access to the vast amounts of cash that big corporates are amassing, I am all for that :-)

7/4/2012 4:42 PM EDT

Stealing money from the rich is still theft.

Intel has always been an aggressive company. If the EU fined every company that made volume deals with production houses, the whole world would be guilty and no one would do business with Europe again.
This is just politics being run through a court system. Its a populace approach to beat up on the big industry companies to take the focus off domestic issues.

7/4/2012 11:51 PM EDT

Intel claim’s EU failing to establish consumer harm or competitive foreclosure, evidence that is inadequate and claims that are uncertain.

From FTC Docket 9288/9341 discovery, 1st dollar discount where Intel provides a retroactive sales reward on total OEM back in time processor purchases are harmful to AMD, however, no antitrust case precedent supports the practice as industrial or consumer harm. This is a rule of reason claim few litigators would attempt. In x86 sales few believe PC OEMs credit end buyers for retroactive Intel sales rewards received in future time.

Economic assessment of Intel production runs; Pentium through iCore/Westmere, does verify 36% of Intel product priced below cost. Here is the industry harm on case precedent. Production analysis shows predatory supply and pricing practice. Intel gives away equivalent of AMD production every quarter Core 2 Quad through iCore9; P less than MC or MR equals MC. This ends up as a cartel monopsony value.

On consumer side there are two key claims. First a tied charge back price fix known as metered price discrimination. A hidden PC OEM through Intel too distribution financial tie that pays for inventory metering of processors, in transit in PCs, reported to Intel by the distribution chain. Administrative cost of this practice is paid ½ by PC OEMs and ½ by Intel. On average adds $23.50 to the price of a PC 1993 through 2011. This form of price fixing is per se illegal under Sherman and Clayton Act. Is addressed by EU in discounts and rebates, known as Intel Inside, totals $53.764 billion in hidden consumer financial theft misrepresented in Intel financials as a marketing cost. This is also a Sarbanes Oxley violation.

Second consumer harm is monopoly price over charge on high end speed grades produced in limited volume. $21.534 billion has been determined on economic assessment across 61 Intel production runs.

Mike Bruzzone
Camp Marketing