Group items tagged

AT&T said on Monday afternoon that it had withdrawn its $39 billion takeover bid for T-Mobile USA, acknowledging that it could not overcome opposition from the Obama administration to creating the nation’s biggest cellphone service provider.

The company said in a statement that it would continue to invest in wireless spectrum, but could not overcome resistance from both the Justice Department and the Federal Communications Commission.

One company is the nation's biggest cable TV provider. The other owns a TV network, several popular cable channels and a movie studio.

But when it comes to the $30-billion merger of Comcast Corp. and NBC Universal, the regulators and lawmakers who will decide the fate of the deal aren't focusing on the big screen or the small screen. They're looking at the Internet.

Welcome to a media marriage, circa 2010.

But Intel could face even more payouts if Intel competitors, such as AMD, take civil cases on the back of the Commission's regulatory action, according to Alan Davis, an expert in competition law at Pinsent Masons, the law firm behind OUT-LAW.COM.

"This will open the floodgates for competitors to sue," said Davis. "There was a complainant in this case, AMD [Advanced Micro Devices], and without question they and other competitors will pursue a case for damages."

"The fine goes to the European Commission's coffers, not to the competitors who suffered damage to their businesses because of Intel's anti-competitive practices," he said. "What is likely to happen is that action will be started and a massive settlement will be made."

"Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace – characterized by constant innovation, improved product performance and lower prices. There has been absolutely zero harm to consumers. Intel will appeal."

"We do not believe our practices violated European law. 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."

Did the Commission co-operate with the United States on this case?

The Commission and the United States Federal Trade Commission have kept each other regularly and closely informed on the state of play of their respective Intel investigations. These discussions have been held in a co-operative and friendly atmosphere, and have been substantively fruitful in terms of sharing experiences on issues of common interest.

Where does the money go?

Once final judgment has been delivered in any appeals before the Court of First Instance (CFI) and the Court of Justice, the money goes into the EU’s central budget, thus reducing the contributions that Member States pay to the EU.

Does Intel have to pay the fine if it appeals to the European Court of First Instance (CFI)?

Yes. In case of appeals to the CFI, it is normal practice that the fine is paid into a blocked bank account pending the final outcome of the appeals process. Any fine that is provisionally paid will produce interest based on the interest rate applied by the European Central Bank to its main refinancing operations. In exceptional circumstances, companies may be allowed to cover the amount of the fine by a bank guarantee at a higher interest rate.

What percentage of Intel's turnover does the fine represent?

The fine represents 4.15 % of Intel's turnover in 2008. This is less than half the allowable maximum, which is 10% of a company's annual turnover.

How long is the Decision?

The Decision is 542 pages long.

When is the Decision going to be published?

The Decision in English (the official language version of the Decision) will be made available as soon as possible on DG Competition’s website (once relevant business secrets have been taken out). French and German translations will also be made available on DG Competition’s website in due course. A summary of the Decision will be published in the EU's Official Journal L series in all languages (once the translations are available).

Intel awarded major computer manufacturers rebates on condition that they purchased all or almost all of their supplies, at least in certain defined segments, from Intel:

• Intel gave rebates to computer manufacturer A from December 2002 to December 2005 conditional on this manufacturer purchasing exclusively Intel CPUs
• Intel gave rebates to computer manufacturer B from November 2002 to May 2005 conditional on this manufacturer purchasing no less than 95% of its CPU needs for its business desktop computers from Intel (the remaining 5% that computer manufacturer B could purchase from rival chip maker AMD was then subject to further restrictive conditions set out below)
• Intel gave rebates to computer manufacturer C from October 2002 to November 2005 conditional on this manufacturer purchasing no less than 80% of its CPU needs for its desktop and notebook computers from Intel
• Intel gave rebates to computer manufacturer D in 2007 conditional on this manufacturer purchasing its CPU needs for its notebook computers exclusively from Intel.

The Commission has found that Intel excluded its competitor in two ways:

1. through illegal loyalty rebates
2. by paying manufacturers and retailers to restrict the commercialisation of competitors' products.

These illegal actions were designed to preserve Intel's market share at a time when their only significant rival - AMD - was a growing threat to Intel's position. This threat was widely recognised by both computer manufacturers and in Intel's own internal documents seen by the Commission.

The computer manufacturers involved are Acer, Dell, HP, Lenovo and NEC. The retailer involved is Media Saturn Holdings, the parent company of Media Markt.

Naturally, the Commission favours strong, vigorous price competition, including by dominant firms. However, Intel went beyond normal price competition by giving rebates to computer manufacturers on the condition that they bought all, or almost all, of their CPUs from Intel.

Intel also made direct payments to a major retailer – Media Markt - on the condition that it stocked only computers with Intel CPUs.

Similarly, antitrust lobbying is part of a broader “platform war” for IBM, which hopes thereby to keep Microsoft at bay. Among other things, IBM is a sponsor of the European Committee for Interoperable Systems (ECIS), which has many of Microsoft’s other competitors as its members and is one of the prime movers behind the new browser case. It started in late 2007 with a complaint by Opera, a Norwegian browser-maker and ECIS member.

Not to be outdone, Microsoft has entered the antitrust game, too. It recently made an investment in T3, a small vendor of mainframe-like computers, which in January lodged a complaint with the European Commission, alleging that IBM kept it from competing by refusing to license mainframe software to T3’s customers. Microsoft has also lobbied American antitrust regulators to tackle Google, encouraging them to look into an online-advertising deal between the search giant and its rival, Yahoo!, which was eventually abandoned.