EU Antitrust Regulator Scolded For Simply Ignoring Evidence In Intel's Favor

from the well-that's-convenient dept

Fri, Aug 7th 2009 4:29pm — Mike Masnick

It's no secret that we think that EU antitrust regulators are way too aggressive in pursuing antitrust claims against US tech companies. The EU continues to view market size as a problem, rather than looking as closely at actual anticompetitive behavior. And, now, it's coming out that the EU's antitrust regulators may be so overzealous to take down companies that they'll ignore evidence that goes against their hypothesis. The EU's ombudsman has apparently issued a report scolding EU antitrust regulators for flat-out ignoring evidence from a Dell executive concerning Intel and AMD. The EU, as you probably know, fined Intel €1 billion a few months back, finding that the company had abused monopoly powers to force hardware makers into using its chips. But, the EU's ombud discovered that the antitrust regulators had interviewed Dell execs who said simply that AMD's chips didn't have the performance of Intel chips. In fact, in their tests, AMD's chips were "very poor," so they chose Intel chips entirely on the basis of performance. And... conveniently, the EU's antitrust regulators simply failed to record this info and did not include it in their report. Of course, you can make anyone appear to have violated antitrust rules if you purposely ignore all evidence to the contrary.

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Filed Under: antitrust, eu
Companies: amd, dell, intel

36 Comments

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CleverName, 7 Aug 2009 @ 5:21pm

In Related News
I wonder if those same Dell executives would claim that operating systems other than Microsoft have performance that is "very poor".
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Anonymous Coward, 7 Aug 2009 @ 5:35pm

Dell is in Intels pocket just like their in Microsofts
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Lucretious, 7 Aug 2009 @ 5:44pm

Really Mike? As if Dell, the largest PC maker on the planet wouldn't benefit from collusion with Intel in duping EU investigators?

How about when AMD was stomping all over Intel performance-wise several years ago and AMD had to drag Intel snd Dell into court kicking and screaming because Dell refused to sell AMD products under any circumstances.

I'm not denying EU antitrust regulators aren't over-the-top but to simply take the word of some upper management shitbag as proof that there is no monopolistic issues going on is a bit disingenuous.
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Anonymous Coward, 7 Aug 2009 @ 5:55pm

What are you saying?
Three posts in, and I hate what I am seeing. Is this the logic I am seeing?

Intel is a Monopoly.
Dell uses Intel.
Dell is under Intel's Power.
Dell cannot speak against Intel.
Thus no evidence suggest Intel is not a Monopoly.
Goto 1, repeat for every supporter of Intel.

That is... VERY bad logic. If you dismiss any supporter of Intel as being in their pocket, then you are left with only the claims against Intel, and thus, there is no proof otherwise.

So, with the same logic, couldn't you declare AMD and Linux as a monopoly? Dismiss anyone who says they are not as being in the pocket, then without any evidence otherwise, it is what you say?

PLEASE say I am reading this wrong.
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Mike Masnick (profile), 7 Aug 2009 @ 5:57pm

Re:
I'm not denying EU antitrust regulators aren't over-the-top but to simply take the word of some upper management shitbag as proof that there is no monopolistic issues going on is a bit disingenuous.

I didn't say that it, alone was proof that Intel was innocent of antitrust violations, but it certainly calls the entire investigation into question.
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Lucretious, 7 Aug 2009 @ 6:32pm

You seem to be under the impression that people are making assumptions. Maybe some are, but the fact remains there is a history of collusion between Intel and Dell.

Trust me, I'm not one of these guys who assume that any wildly successful company got where they are by abusing the system. For instance, Google is an excellent example of a company coming under fire for various reasons that mainly come down to jealousy and this socialist mentality that big companies = bad. But with the case of Dell / Intel, there IS good cause to beleive that there's some shenanigans going on simply due to their behavior in the past and the potential gains that could be made by such behavior. EU regulators have been incredibly overzealous in the past, particularly with Microsoft, but in this case Intel / Dell have done it to themselves.
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Tripp, 7 Aug 2009 @ 8:10pm

Re: In Related News
I dunno, I mean they do offer some of their netbooks with Linux on it. They also offer several different versions of Windows and linux on their enterprise level systems.

I believe they are just using the logic of anyone that would want an operating system other then Windows on their systems has enough know how to download it for free and install it themselves. Plus, I highly doubt most of those people would use a copy of Linux installed by Dell anyway. I know I for one, do a system wipe on any new system I get and put a fresh copy of Windows (or Linux depending on what I'm using it for) on the system ^_^
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Clevername, 7 Aug 2009 @ 8:17pm

Re: Re: In Related News
"they do offer some of their netbooks with Linux "

- Obscure offers are due to complaints by potential customers. They listen more intently when Microsoft complains.

"anyone that would want an operating system other then Windows on their systems has enough know how to download it for free and install it themselves."

- After having been forced to pay the Microsoft tax
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Merlin, 7 Aug 2009 @ 9:45pm

Over-zealous?
Did someone say a government body was over-zealous in attacking Microsoft? If you understood anything about how insanely anti-competitive and downright unethical Microsoft has been in its history, there is no way you would say such a thing.

You can't possibly be over-zealous in dealing with anti-trust cases. Even if you're probing where there's nothing going on, at the very least you're keeping companies on their toes and reminding them you're watching them in case they *do* do something wrong. And they have a HUGE INCENTIVE to collude and engage in anti-competitive behavior. In the history of industrialization many, *many* industries with even a marginal barrier to entry have provided instances where companies at least tacitly attempted to collude.

Criticizing the EU for sticking up for the little guy after centuries of big-business and rich people-favoritism is utterly moronic.
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Elmer Phud, 7 Aug 2009 @ 10:23pm

With all the claims of abuse by Intel, not one company has ever stepped forward and said they were abused or coerced. Not one. Had any company been abused this would be the perfect time to say so because with all the attention Intel couldn't possibly retaliate. Yet no company has ever claimed to have been abused and evidence is suppressed when a company says no abuse took place. Wouldn't it have made sense to simply ask the companies if Intel coerced them? Yet no company has ever said it did...
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Big Al, 7 Aug 2009 @ 10:32pm

Re: Re:
Similarly, Intel screaming 'I didn't do it' would also be enough to call 'the entire investigation into question'? I've been an AMD user at home for a lot of years now, using 'equivalent' Intel processors at work, and I cannot see, both from experience and benchmarks, how AMD performance can be described as 'very poor'. I'm afraid I'd have to agree with the above poster, and start looking for a money/benefits trail on this one, since the independent evidence does not seem to agree with the comment. I doubt very much that the EU investigators took it at face-value either.
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Azrael (profile), 7 Aug 2009 @ 11:32pm

Re: Re:
In that case you should have done just a little reading, let's say at Tom's Hardware. You should have discovered that those "very poor" performance would really mean less than 8% performance drop for an average of 15% less price in AMD's favor.
I didn't thought you are such a gullible person.
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Azrael (profile), 7 Aug 2009 @ 11:35pm

Re:
I think you need to do a little reading on what a monopoly is and how it is enforced.
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Laurent GUERBY, 8 Aug 2009 @ 12:38am

Data!
Without seeing the documents the only conclusion so far for techdirt readers is that Intel pays more advertising in the WSJ than AMD, so the article written by a professionnal journalist is pro-Intel.

Anyway as for performance it's a joke of course. Where I worked we stopped purchasing Intel servers (from Dell/IBM/...) and switched to AMD (from Sun) since they offered better performance/cost. When Intel decided to produce better chips we went back to Intel (from Dell).

Dell lost scores and scores of customers (we bought servers by the hundreds) when it was still Intel only and AMD had better chips (but Dell was still saying of course Intel chips are better - Mike you know how marketing works).

For data just look at the sequence of http://www.top500.org/ and the rise (and then relative fall) of AMD.

Now of course since the EU documents are secret we don't know what's really in it.
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HolaJohnny (profile), 8 Aug 2009 @ 12:41am

A wee bit off topic but...
The EU does seem to shown a rabid dog attitude to non EU companies, especially those from North America. From surface appearances along the lines of lash out against any company that isn't in the EU. IMHO the antitrust regulators in the EU are less concerned with a monopoly as with protecting EU industry from competition.
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Fred McTaker (profile), 8 Aug 2009 @ 1:09am

Re: Re:
"Dell execs who said simply that AMD's chips didn't have the performance of Intel chips"

This is like taking a statement from an Xbox fanbois, that the "PS3 can't compare to the power of the Xbox360." Unless they are backing up that claim with some actual benchmarks and recorded testing numbers, I would ignore the Dell execs' statements as being too subjective to be admissible as evidence. Major anti-competitive rebates by one processor provider would definitely make the competition suddenly look "very poor." Even if this was true at the time the Dell execs were interviewed, it definitely wasn't true for the entire period in which Dell sold Intel chips exclusively. AMD's first line of 64-bit processors trounced any of Intel's 64-bit solutions for several years, especially in terms of Win32 performance. There are benchmarks and hard numbers to back that up, from reliable third parties (Tom's Hardware Guide is a good example), so what use is the subjective statement of an active member in the collusion being investigated? The investigator did the right thing by not listening to Dell blowhards.
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Mark Michelssen, 8 Aug 2009 @ 3:03am

Masnick's US imperialism
> EU antitrust regulators are way too aggressive in pursuing antitrust claims against US tech companies.

They're behaving the same with EU-based tech (e.g. telco) and non-tech (e.g. building materials, energy) companies. Just look at the other recent cases. (Of course, reading only US media you won't find these -- so read at least UK media, since you probably only understand English.)

> The EU continues to view market size as a problem.

Fortunately, the EU is not a colony of the US empire, and thus entitled to its own values and a more practical antitrust execution. Nobody *forces* Intel to sell its products in Europe.
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techflaws.org (profile), 8 Aug 2009 @ 3:26am

Say what?
"The EU continues to view market size as a problem, rather than looking as closely at actual anticompetitive behavior"

How is Intel paying one of the largest chains "Media Markt" not to sell PCs with AMD chips not anticompetitive behavior?
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mhenriday (profile), 8 Aug 2009 @ 4:12am

Overzealous ?
«The reports says that the executive, who isn't identified, is believed to have told investigators that Dell viewed the performance of Intel rival Advanced Micro DevicesInc. as "very poor."» That's really conclusive evidence, is it not - an unidentified and unidentifiable Dell exec is «believed» to have told investigators that AMD performance (no chips specified) was «very poor». Perhaps you know, Mike, to which chips reference was being made (excuse me, «believed» to have been made) ? The ombudman's report has not yet been released - but it has been «reviewed» by that unbiased source, the Wall Street Journal. I'm no fan of the European Commission, but at least they seem, unlike their US counterparts over at the FTC or the Antitrust Division of the Justice (sic !) Department, to be performing their task of keeping the worst monopolistic practices at bay. If, Mike, you think these activities are exclusively or mainly directed at firms headquartered in the United States, you haven't been doing your homework - huge fines have been and are regularly levied on European firms or groups of European firms that have colluded to stifle competition. So wipe your tears for Intel, Microsoft, and others away, Mike - they don't deserve them !... Henri
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CleverName, 8 Aug 2009 @ 6:31am

Re: Re:
I did not find any reference to the actual tests that the exec referred to. There is quite a lot of biased testing that goes on in the industry and I would not be suprised to find that this particular test was slanted towards a particular goal. I also find it hard to believe that an exec knows anything about hardware performance or the way in which it is conducted.
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..., 8 Aug 2009 @ 6:32am

Re: What are you saying?
I read your comment several times, and it does not make any sense.
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Anonymous Coward, 8 Aug 2009 @ 8:33am

Slow to Change, Tainted by Past
Personally, I will likely never use an AMD chip again. Tried to save money by buying a computer with a AMD Processor. Thing would crash with Kernal Panics if it ran for more then 4 hours. The second and last one I had would just lock up suddenly when running some games. I have never had an actual problem with an Intel chip however. (And yes, those MIGHT not have been the chip, but my view is based on that commonality.)

However, never had a problem with an Intel chip. And even if AMD has improved greatly, and is now a better chip, the perception is lingering, at least in my case, that it is a disaster waiting to happen.

Once you get a bad rep, it can take years, or decades, for consumers to change back to a good view, and even longer with slow lumbering companies.
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CleverName, 8 Aug 2009 @ 9:20am

Re: Slow to Change, Tainted by Past
Did you purchase that as a system or did you build it yourself?
Was there a warranty period?
Did you attempt to fix it?
Did you troubleshoot the problem?

Kernal panic is not always due to CPU issues

It appears you have one data point wrt AMD CPUs. And from this you draw conclusions?

Excuse me if I am wrong, but your post appears to be FUD.
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Anonymous Coward, 8 Aug 2009 @ 11:23am

Anti trust laws are often used not to eliminate unethical business practices, but to eliminate companies that improve aggregate output and innovation in order to reduce aggregate output in a way that increases profit for special interest groups so those special interest groups can spend some of those additional profits toward campaign contributions (and potentially give some of those additional funds, perhaps illegally, to elected officials, either via gifts cash or "donations").

From an economics perspective this makes sense. Monopoly = less aggregate output + more profits

So under certain conditions less aggregate output, to some degree, = more profits for the seller.

You have a company that optimizes aggregate output providing less profits for the seller than could be provided with a market distortion.

Special interest groups see all the aggregate output and they want to find ways to turn as much of that aggregate output as possible into profits for them (hence reducing aggregate output by converting as much consumer surplus into producer surplus as possible).

They lobby the government for restrictions that reduce consumer surplus and increase producer surplus and hence turns some of that aggregate output into producer surplus.

They take some of that money and contribute to political campaigns for politicians that would maintain their profits at the expense of aggregate output.

So everyone but the consumer and society wins. Politicians win (more campaign contributions) and those that increase their profits win. Society loses out because less aggregate output is produced.
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Anonymous Coward, 8 Aug 2009 @ 11:27am

Re:
So take google. Google produces a lot of consumer surplus and evil entities see all that consumer surplus and they think, "with all this consumer surplus why not try to find ways to convert some of that consumer surplus to producer surplus for ourselves." So they would try to lobby the government to find ways to attack google; ie: blame them for anti competitive behavior. If Google suffers as a result they may be less able to provide so much consumer surplus and hence there is more opportunity to exploit consumers in ways that produce less consumer surplus and more producer surplus. These corporations would then take some of that additional producer surplus and use it to fund campaigns for politicians that would maintain the status quo.
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Overtkill, 8 Aug 2009 @ 1:44pm

Really?
Well, being an OEM builder myself, building high end workstations and servers for over 15 years, I would have to say that if a hardware vendor came to me with the attitude that I had to sell their product instead of what I knew was superior to theirs in every respect (Through personal experience). I would have to give the interloper the finger.

That being said, there is building what the client requests, and if they told me to build a system using the interlopers parts, I am duty bound to oblige the customer.

Point being, every one has an opinion. And since the EU seems to be hard asses when anything tech twitches the wrong way, this makes me wonder if the people involved in making these decisions aren't on the other sides payroll. I would like to see them take a test of some sort to see how these decision makers lean on issue.

Another point of view that the EU has very specific guidelines when it comes to a lot of different products entering and selling their market. This could simply be the case with the PC market.

Something Dell should consider; Market their products as custom systems. -As in PC's by Dell are each a custom computer made for you, the public. This would likely take the wind out of the sails of the EU, and probably bolster their sales in the process.

Thanks for reading my long winded post. :)
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Ben Zayb, 8 Aug 2009 @ 2:25pm

Re: Really?
"Something Dell should consider; Market their products as custom systems. -As in PC's by Dell are each a custom computer made for you, the public. This would likely take the wind out of the sails of the EU, and probably bolster their sales in the process."

LOL!!! That's exactly the point of this anti-trust action!
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Luci, 8 Aug 2009 @ 10:48pm

Re:
Neither Dell nor Intel are monopolies. The fact remains that if you do not like either of them, you can buy from elsewhere. I can buy better computers, cheaper, but as to processors, I've found that Intel was the best choice two years ago in terms of processing, power consumption, and heat generation/dissipation. Now? Couldn't say.
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Luci, 8 Aug 2009 @ 10:49pm

Re: Over-zealous?
No. This isn't about Micro$oft. It's about Intel. Try reading the article.
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CleverName, 9 Aug 2009 @ 7:07am

Re: Re:
There are many ways to measure the processing, power consumption, and heat generation/dissipation characteristics of hardware used in computers. Hopefully you were looking at the same measurement techniques perfomed upon both products and that these techniques were a good simulation of the applications which you planned on using. Otherwise, your conclusion is suspect.
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Fungo Knubb, 9 Aug 2009 @ 10:22am

...In their pocket
It would seem that given this new story about EU's regulators that it is they who are in AMD's pocket, eh?

Who woulda guessed?

/Fungo
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CleverName, 9 Aug 2009 @ 2:03pm

Re: ...In their pocket
"It would seem that given this new story about EU's regulators that it is they who are in AMD's pocket,"

Why do you say that?
Is there any thing you would like to share, to back your assumption ...
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The Cenobyte, 10 Aug 2009 @ 6:36am

I don't like anti-trust but...
I would have ignored the Dell guys too. All you have to do is look around at testing of these chips from indipendent 3rd parties and you can see that their claim that intel offers much better perfomace is just flat out wrong.

Not only does the top perfomance stop switch back and forth between Intel and AMD on a regualar basis, but AMD almost always offers there chips much cheaper than Intel. At many pointed in the last 5 years AMD has had the fastest chips that cost much less than Intels fastest offering.

AMD is almost always the best option for a low end desktop because they are so much cheaper, and the top end chips are really anyones game.

So as much as I don't like anti-trust law, I would have ingored Dells interviews as out and out lies.
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Jrosen (profile), 11 Aug 2009 @ 9:14am

intel better than AMD? In what world?
I think with the last 3 or 4 computers I've purchased I've used AMD every time, and with benchmarks, AMD has always performed better. Just bought a machine less than two weeks ago. Guess what. AMD again.
While I'm not so sure I'd agree with the EU board saying Intel is a monopoly, the Dell bit is a joke either way, obviously paid-off.
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Tom, 30 Dec 2010 @ 11:12am

Re: Re: Over-zealous?
Um, It's not about Intel, per se, either. It's about an EU ombudsman scolding EU regulators for leaving evidence out of the record. I know many geeks have an emotional ball and chain of one technology or another, but this is not the forum.

I found this article to be a good one in reporting that at least the EU was aware of it's own bias. That is a good thing.
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sprearson81 (profile), 8 Jun 2012 @ 7:03pm

Good article.
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