Intel in Euro-Land

Computer chips are getting faster and smaller, and prices are dropping amid fierce competition. So naturally the European Commission thinks this is the ideal time to lodge another antitrust suit against another American technology titan.

Last Friday, EU regulators accused Intel Corp. of offering computer makers -- brace yourself -- rebates designed to harm rival Advanced Micro Devices, or AMD, in the chip market. In Brussels jargon, that's an "abuse of a dominant position" and could lead to a fine of as much as 10% of Intel's annual global turnover, or perhaps €3.5 billion...

The investigations were prompted by AMD, which has launched legal proceedings around the world against its archrival. This regulatory forum shopping includes a pending lawsuit in a federal court in Delaware filed two years ago...

But with about 20% of the $33 billion market for microprocessors, AMD is hardly a push-over. The company's ups and downs -- it gained share in 2005 and most of 2006 before suffering a downturn late last year -- seem to contradict its allegations of Intel's anti-competitive behavior. A reasonable conclusion is that AMD's fortunes correspond more closely to its own innovation rate than to any rebate scheme by a rival. Similarly, Intel's recent comeback was due to its competitive products, chips that increase performance but lower energy consumption.

The case against Intel is the latest in a series of EU assaults on successful U.S. technology companies. Brussels apparently is determined that if Europe can't be a global leader in information technology it can at least become that industry's world-wide regulator. If it succeeds, the world is bound to be a less competitive and innovative place -- like, well, Europe.

The EU is simply using the anti-trust laws to tip the balance of foreign trade. My recommendation would be for Intel to pull out of Europe altogether. Let the resellers market their product there, and deny the EU jurisdiction over them.

BTW, I'm surprised that the WSJ finally figured out that the EU is using its anti-trust laws to tip the balance of trade. They've been pretty much oblivious to that for years.

I was aghast to learn that in France, and most of Europe, it is illegal for a store to have a “sale.”
There is one period of the year (I think July), when all stores can offer a certain discount to clear out old inventory, but after that, you may NOT compete against another company by offering enticements of any monetary kind.
No wonder.

In the US some states have legislation that sets a minimum price for gasoline which prevents retailers like grocery chains or discount centers like Sam Club from selling gas at a discount or below wholesale price to their members or customers. I see very little difference between this and what the EU bureaucrats are doing to Intel.

We had a law like that here in Colorado. This was corrected recently and now we can buy our gas at the supermarket and at least 10 cents cheaper per gallon than other gas stations.

It was a lost cause defending the original law but, like controlling immigration, legislators didn’t want it. They fought it even though it was political suicide. There were at least two iterations before it succeeded.

The WSJ is a pure and simple (minded) propaganda gazette.

“— brace yourself — rebates designed to harm rival Advanced Micro Devices, or AMD, in the chip market. In Brussels jargon, that’s an “abuse of a dominant position” and could lead to a fine of as much as 10% “

And this is utter BS. Brussel (a bunch of drunken monkeys according to WSJ) did not shoot at Intel because of rebates.

It was aimed at the behaviour of INTEL to find out about already closed contracts with AMD and systematically offering money to unrightfully brake these existing contracts thus compensating penalties. You think this is the same as -— brace yourself — giving rebates ?

Now brace again-

Why is the WSJ trying to ridicule Brussels as a fallen world conquerer ? Does it want to cover up that its propaganda cannons are aimed to cover the world dominance tour of intel ? Which american customer is served best with a monopoly ?

Just because you like to play the blame game against the EU so much you shouldn’t pull the carriage that drives you to the butcher.

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