On May 13, the European Commission handed Intel a fine of €1.06 billion for illegally abusing its market position to force rival microprocessor firm AMD out of the market. Nine days on, considerable punditry has emerged to make the spurious claim that both AMD and the EC cooperated in a verdict that penalizes Intel for simply conducting normal capitalist business. Other opponents are admonishing the decision with the view that AMD is somehow abusing the courts to compensate for an inferior processor. While people are certainly entitled to their opinions, this does not excuse the ignorance to capitalism’s governing laws in which these arguments are rooted.

The European Commission’s recent ruling is the final act in a case that began nearly nine years ago with a complaint filed by AMD in October, 2000 that alleged Intel was engaging in anti-competitive practices. The subsequent years of legal wrangling benefited heavily from EU directives that provide strict guidelines for the archival of business transactions, practices and agreements. The evidence uncovered as a result of this legislation allowed European regulators to boil the case down to two violations of Article 82 (”Competition”) in the EC Treaty:

1. “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.”
2. “Intel awarded computer manufacturers payments – unrelated to any particular purchases from Intel – on condition that these computer manufacturers postponed or cancelled the launch of specific AMD-based products and/or put restrictions on the distribution of specific AMD-based products.”

Specific instances of these violations are revealed in commission brief IP/09/745, issued on 13 May, 2009.

In the aftermath of the ruling, both armchair pundits and Intel executives have denounced the ruling as punishment for market dominance. In the case of outgoing Intel Chairman of the Board Craig Barret, the legislation that motivated the record-setting fine is seen as an anachronism.

“The antitrust rules and regulations seem designed for a different era. When you look at high-tech companies, with the high R&D budgets, specialization and market creation they need to hold their big market shares, it’s so very different from the old world of oil companies and auto makers that the antitrust regulations were designed for,” he said.

While such talking points can be expected from executives leading the firm getting shelled for its behavior, it is this alarming nonchalance to the rules of law that undoubtedly drove Intel afoul of Article 82.

Even the casual observer is more than ready to express their ignorance regarding EU legislation when commenting on the EC’s ruling.

“I have no problem with any company using any of its resources to A) produce a superior product, B) based on that superiority (perceived or otherwise) to use those resources to promote it to people who want to buy it, be it OEM or 3rd party, C) use those resources to garner as much market share as possible, D) use those resources to crush your competition,” says commenter Methadras in AMD’s piece on the decision.

Positions such at this serve no other purpose other than to inject a perspective that’s ignorant to the laws and mechanics of capitalism in the European Union. Believing that Intel conducted business honorably is irrelevant given that nearly a decade of evidence proves that Intel engaged in practices that violate clear EU policy.

Intel apologists have also attempted to make the point that AMD launched its case to compensate for inferior CPU technology.

“I think if you guys actually started producing CPU’s that are actually contenders to Intel’s maybe you wouldn’t have to sue them so many times to get your product sold,” says commenter Sorry I’m a Intel Fan.

Not only does this argument ignore that the formative years of the case were executed when AMD held a technological advantage in the Athlon 64, it’s yet another position that does everything but acknowledge that Intel plainly operated contradictory to Article 82.

While it is impossible to know the geography of today’s market had Intel not attempted to oust AMD from the market through exclusive purchasing agreements, purchasing quotas, OEM incentives to delay AMD-based product launches, and secretive rebates to compel Intel exclusivity, it is obvious that these practices impaired consumer choice and violated the laws of commerce in the EU. Any argument that attempts to shift the focus away from facts and towards technology or personal economic opinion is little more consummate sophistry.