Group items matching

in title, tags, annotations or url

Most likely, we grant you, it was coincidence. But we couldn’t help notice the timing: Two days after the DOJ’s new antitrust head, Christine Varney, publicly repudiates her predecessors by pledging to ramp up enforcement on so-called “single-firm” monopolistic behavior, the European Union takes a sledgehammer to Intel Corp., fining it $1.45 billion for alleged monopolistic activity. The fine is the largest ever assessed for monopoly abuse. Click here for the WSJ story, from Charles Forelle; here for the NYT story; here for the NYT story; here for the FT story; here for the Commission’s statement; here for Intel’s response.

John Pheasant, an antitrust practitioner at Hogan & Hartson in London and Brussels, told the Law Blog that some of the evidence does “not look very good for Intel,” adding that “if the facts are there, this type of conduct is more likely to be regarded as abusive if practiced by a dominant company. . . .”

On Varney’s statement from earlier this week, Kroes said the Justice Department’s stance gave her a “huge positive feeling. The more competition authorities joining us in our competition philosophy, the better it is.”

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).

The Commission found that Intel engaged in two specific forms of illegal practice. First, Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel. Intel also made direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs. Such rebates and payments effectively prevented customers - and ultimately consumers - from choosing alternative products. Second, Intel made direct payments to computer manufacturers to halt or delay the launch of specific products containing competitors’ x86 CPUs and to limit the sales channels available to these products.

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.

Furthermore, Intel made payments to major retailer Media Saturn Holding from October 2002 to December 2007 on condition that it exclusively sold Intel-based PCs in all countries in which Media Saturn Holding is active.

The Commission has found that Intel excluded its competitor in two ways: through illegal loyalty rebates 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.

Just to give you one example: in one case, a computer manufacturer took up only a small part of an offer by AMD of free CPUs because acceptance of all the free CPUs offered would have led that computer manufacturer to breach the conditions of its agreement with Intel and to lose rebates on all its much more numerous Intel purchases.

MEMO/09/15 Brussels, 17th January 2009

The European Commission can confirm that it has sent a Statement of Objections (SO) to Microsoft on 15th January 2009. The SO outlines the Commission’s preliminary view that Microsoft’s tying of its web browser Internet Explorer to its dominant client PC operating system Windows infringes the EC Treaty rules on abuse of a dominant position (Article 82).

In the SO, the Commission sets out evidence and outlines its preliminary conclusion that Microsoft’s tying of Internet Explorer to the Windows operating system harms competition between web browsers, undermines product innovation and ultimately reduces consumer choice. The SO is based on the legal and economic principles established in the judgment of the Court of First Instance of 17 September 2007 (case T-201/04), in which the Court of First Instance upheld the Commission's decision of March 2004 (see IP/04/382), finding that Microsoft had abused its dominant position in the PC operating system market by tying Windows Media Player to its Windows PC operating system (see MEMO/07/359).

COMP/39.530 - Microsoft (Tying) Microsoft 14.01.2008 MemoAntitrust: Commission initiates formal investigations against Microsoft in two cases of suspected abuse of dominant market position 14.01.2008 Opening of Proceedings Concerns economic activity: C33.2

As regards interoperability, in its Microsoft judgment of 17 September 2007, the Court of First Instance confirmed the principles that must be respected by dominant companies as regards interoperability disclosures. In the complaint by ECIS, Microsoft is alleged to have illegally refused to disclose interoperability information across a broad range of products, including information related to its Office suite, a number of its server products, and also in relation to the so called .NET Framework. The Commission's examination will therefore focus on all these areas, including the question whether Microsoft's new file format Office Open XML, as implemented in Office, is sufficiently interoperable with competitors' products. As for the tying of separate software products, in its Microsoft judgment of 17 September 2007, the Court of First Instance confirmed the principles that must be respected by dominant companies. In a complaint by Opera, a competing browser vendor, Microsoft is alleged to have engaged in illegal tying of its Internet Explorer product to its dominant Windows operating system. The complaint alleges that there is ongoing competitive harm from Microsoft's practices, in particular in view of new proprietary technologies that Microsoft has allegedly introduced in its browser that would reduce compatibility with open internet standards, and therefore hinder competition. In addition, allegations of tying of other separate software products by Microsoft, including desktop search and Windows Live have been brought to the Commission's attention. The Commission's investigation will therefore focus on allegations that a range of products have been unlawfully tied to sales of Microsoft's dominant operating system.

In 2006, the European Commission has started the revision of the European Interoperability Framework (EIF) and the Architecture Guidelines (AG).

The European Commission has started drafting the EIF v2.0 in close cooperation with the concerned Commission services and with the Members States as well as with the Candidate Countries and EEA Countries as observers.

A draft document from which the final EIF V2.0 will be elaborated was available for external comments till the 22nd September. The proposal for the new EIF v2.0 that has been subject to consultation, is available: [3508 Kb]

In March, Microsoft announced that their upcoming Internet Explorer 8 would: "use its most standards compliant mode, IE8 Standards, as the default." Note the last word: default. Microsoft argued that, in light of their newly published interoperability principles, it was the right thing to do. This declaration heralded an about-face and was widely praised by the web standards community; people were stunned and delighted by Microsoft's promise. This week, the promise was broken. It lasted less than six months. Now that Internet Explorer IE8 beta 2 is released, we know that many, if not most, pages viewed in IE8 will not be shown in standards mode by default.

How many pages are affected by this change? Here's the back of my envelope: The PC market can be split into two segments — the enterprise market and the home market. The enterprise market accounts for around 60 per cent of all PCs sold, while the home market accounts for the remaining 40 per cent. Within enterprises, intranets are used for all sorts of things and account for, perhaps, 80 per cent of all page views. Thus, intranets account for about half of all page views on PCs!

    The need for tight security may sometimes appear to clash with the need to exchange information effectively. However, TESTA offers an appropriate solution. It constitutes the European Community's own private network, isolated from the Internet and allows officials from different Ministries to communicate at a trans-European level in a safe and prompt way.

What is TESTA?ObjectivesHow does it work?AchievementsWho benefits?The role of TESTA in IDABCThe future of TESTATechnical InformationDocumentation

What is TESTA? TESTA is the European Community's own private, IP-based network. TESTA offers a telecommunications interconnection platform that responds to the growing need for secure information exchange between European public administrations. It is a European IP network, similar to the Internet in its universal reach, but dedicated to inter-administrative requirements and providing guaranteed performance levels.