Intel Partners See No Impact In U.S. From EU's Antitrust Fine

The European Commission on Monday outlined its reasons for the big antitrust fine, handed down in May of this year.

Among other reasons were alleged illegal practices to exclude competitor from the x86-based processor market, including wholly or partially hidden rebates to computer makers who agreed to source all or almost all of their x86 processors from Intel, direct payments to Europe's largest PC retailer for selling only computers with Intel x86 processors, and making payments to computer manufacturers to stop or delay the launch of specific products containing AMD's x86 processors.

U.S.-based systems builders said they have seen no such activities which would be considered illegal. Instead, they said, rebates and other programs, even aggressive ones, are a normal part of doing business.

The EU ruling and subsequent fine is a bunch of "hooey," said Todd Swank, vice president of marketing at Northern Computer Technologies (Nor-Tech), a Burnsville, Minn.-based custom systems builder.

"I think the EU is hunting for ways to socialize business," Swank said.

In the U.S., rebate programs and similar promotions are pretty straightforward, Swank said.

"AMD and Intel have similar programs," he said. "Both give rebates to go after specific products. But to give money to not do something -- I've been doing marketing in the U.S. for 10 years, and I've not seen anything like that."

Swank said that it is possible for Intel to provide rebates to a company like Hewlett-Packard on the condition that the vendor purchases 95 percent of its processor from Intel. But that is very hard to do in the channel. "There are too many players in this market," Swank said. "It would be hard to keep a lid on it for any time."

Back during the time that the alleged violations occurred, the only way for system builders to compete against the OEMs was to engage with AMD, Swank said.

"Back in the days, the only way to compete was to offer AMD as an alternative, as it was the only vendor with features like 64-bit processing," he said. "There was a lot we could say to position ourselves against HP and Dell who at the time did little business with AMD."

Another system builder, who prefered to remain anonymous, said that in a way the EU verdict and fine are not surprising given how Intel sometimes strongarms system builders.

However, the system builder said, Intel lately has been very supportive of the channel, and has gone out of its way to be more channel-friendly.

AMD, in the meantime, is just as apt to use similar strong tactics to keep its system builder partners in line.

"Right now, AMD is under stress," he system builder said. "For example, even before we launch a Web site for a new product, AMD might find it online and tell us to change this or change that without paying us. It might be a simple mistake, like us not using the most current terminology, but AMD needn't get excited. We created the page. They should be happy."