Welcome!

Agile Computing Authors: Yeshim Deniz, Pat Romanski, Carmen Gonzalez, Jason Bloomberg, Elizabeth White

Related Topics: Microservices Expo

Microservices Expo: Article

EC Fines Intel $1.45 Billion; Otellini - "Decision is Wrong"

“Intel takes strong exception ... We believe the decision is wrong." - Intel CEO Paul Otellini

The European Commission today fined Intel $1.45 billion because of its “illegal” rebates, which the company was told to abandon immediately. The fine is the largest single penalty the EC regulators have ever exacted, more than the combined fines Microsoft had to pay.

Intel immediately said it would appeal the decision and its general counsel Bruce Sewell said he didn’t know how to comply with the cease and desist order.

“I don’t know what would change,” he said “Intel only has a simple volume discount. The more you buy the lower the price.”

When he said that Sewell and his legal team had yet to thumb through the lengthy EC decision, believed to have been edited to survive appeal, and said he was only working off the EC press release.

Intel CEO Paul Otellini issued a statement saying, “Intel takes strong exception to this decision. We believe the decision is wrong.”

The company claimed in court last year that the EC wouldn’t accept evidence that would have vindicated it.

Otellini’s statement pressed that point. “We do not believe our practices violated European law,” he said “The natural result of a competitive market with only two major suppliers is that when one company wins sales, the other does not. The Directorate General for Competition of the Commission ignored or refused to obtain significant evidence that contradicts the assertions in this decision.

We believe this evidence shows that when companies perform well the market rewards them, when they don’t perform the market acts accordingly.”

>It is unclear how exactly the EC came up with the seemingly arbitrary >1.06 billion euro fine. It is supposed to reflect the value of Intel x86

>sales in the European Economic Area over a period of five years and >three months between October 2002 and December 2007.

>Intel’s worldwide revenue in 2007 was $38.8 billion. The EU is said >to account for 30% of its sales.

>Europe’s antitrust chief Neelie Kroes joked during her press >conference in Brussels that Intel would have to change the tag line in >its new ad campaign from “sponsors of tomorrow” to “sponsor of the >European taxpayer.”

>Intel is accused of giving “wholly or partially hidden rebates” to Acer,

>Dell, HP, Lenovo and NEC on condition that they bought all, or >almost all, their x86 CPUs from Intel.

>It is also accused of paying OEMs to halt or delay the launch of AMD >boxes and to limit their distribution when they did come out.

>It is supposed to have made direct payments to Media Saturn >Holding, owner of the MediaMarkt chain, the only European entity >named in the indictment, to stock only computers with Intel x86 >CPUs.

>Kroes contends that “Intel has harmed millions of European >consumers by deliberately acting to keep competitors out of the >market for computer chips for many years. Such a serious and >sustained violation of the EU’s antitrust rules cannot be tolerated.”

>She promised to actively monitor Intel’s compliance with the >decision.

The Commission said that it “does not object to rebates in themselves but to the conditions Intel attached to those rebates.”

It says the illegal condition aren’t explicit in Intel’s contracts but claims it found proof they exist when it raided Intel, OEM and retailer offices and pulled e-mail. It also has formal statements from the other companies concerned along with “evidence that Intel had sought to conceal the conditions associated with its payments.”

The EC claims Intel structured its prices to ensure that an OEM who bought AMD parts would lose a “significant rebate” on its Intel purchases. It claims the situation would have forced AMD, which it described as “just as efficient as Intel,” selling chips under cost to compete for the business.

It said AMD offered an OEM a million free CPUs but the offer was refused because the OEM would have lost Intel’s rebate on the rest of its million of chip purchasse. In the end, the OEM only took 160,000 CPUs for free.

It claims Intel-style rebates are illegal elsewhere in the world too.

At a press conference later today Intel is reportedly going to bring witnesses to refute these charges.

AMD, where today will be like Marti Gras, expects to leverage the EC’s findings in its own antitrust case against Intel in the US. It goes to trial next year and there’s a pretty penny at stake.

AMD may also finally be able to entice the Justice Department into investigating Intel, a feat that has so far eluded it though it did get Intel in Dutch with regulators in Korea and Japan as well as Brussels.

The new head of the DOJ’s Antitrust Division Christine Varney, the ex-Netscape lawyer appointed by the Obama White House, expects to “restore an aggressive enforcement policy against corporations that use their market dominance to elbow out competitors or keep them from gaining market share,” according to a speech she gave Monday morning that was first reported by the New York Times.

The policies of the Bush administration, which interpreted antitrust law differently, are supposed to have pushed the little guy to complain to the EC and regulators in the Far East.

Varney has officially rescinded the Bush guidelines for courts and private litigants memorialized in a 215-page report written by the DOJ last year that supposedly made cases involving monopoly and predatory practices hard to bring.

The move, coupled with the EC’s decision, could encourage the Federal Trade Commission, which has been investigating Intel and where Verney was once a commissioner, to turn its probe into a suit.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software in the hope of capturing value in IoT. Although IoT is relatively new in the market, it has already gone through many promotional terms such as IoE, IoX, SDX, Edge/Fog, Mist Compute, etc. Ultimately, irrespective of the name, it is about deriving value from independent software assets participating in an ecosystem as one comprehensive solution.
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Val...
The age of Digital Disruption is evolving into the next era – Digital Cohesion, an age in which applications securely self-assemble and deliver predictive services that continuously adapt to user behavior. Information from devices, sensors and applications around us will drive services seamlessly across mobile and fixed devices/infrastructure. This evolution is happening now in software defined services and secure networking. Four key drivers – Performance, Economics, Interoperability and Trust ...
SYS-CON Events announced today that Hitachi Data Systems, a wholly owned subsidiary of Hitachi LTD., will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City. Hitachi Data Systems (HDS) will be featuring the Hitachi Content Platform (HCP) portfolio. This is the industry’s only offering that allows organizations to bring together object storage, file sync and share, cloud storage gateways, and sophisticated search an...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Analytic. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...