Intel Corporation has been taking a bit of heat from the government lately, both domestic and abroad.  In May, the European Union fined Intel $1.45 billion over anti-competitive practices.  And two months ago Intel received a letter last week that PCs in Cuba contain Celeron processors even though there is an embargo.

Dealing with the European Union
Interestingly ombudsman P. Nikiforos Diamandouros criticized the EU for not recording the case file in the decision against the chipmaker.  And a Dell executive cited AMD’s performance being poor as the reason why the PC manufacturing company chose Intel as their supplier.  This makes the verdict of the decision to penalize Intel seem a bit off.  More details to follow as discussions arise on this topic.

Dealing with the U.S. Securities and Exchange Commission
The SEC sent Intel a confidential letter on June 4th stating the following:
“We are aware of a May 2008 news report that PCs in Cuba contain your Celeron processors. Cuba, Iran, Sudan, and Syria are identified by the State Department as state sponsors of terrorism, and are subject to U.S. economic sanctions and export controls.”

In addition, the SEC wrote “We note that your Form 10-K does not include disclosure regarding contacts with Cuba, Iran, Sudan, and Syria. Please describe to us the nature and extent of any past, current, and anticipated contacts with the referenced countries, whether through distributors, resellers, licensees, or other direct or indirect arrangements.”

The Cubans have PCs that have Intel Celeron processors with 80GB hard drives and 512MB of RAM.  They also have the Windows XP operating system.  Intel responded with the following letter:

“Intel has no business contacts with the Subject Countries, either directly or indirectly through tacit agreement with its customers. Intel does not provide products or technology to the Subject Countries….”

To be honest, perhaps it is a good thing that all the Celerons are ending up in Cuba.  They should even take computers marked with “dual-core” processors.  And let’s give the Americans more Core 2 Duos!

In less than a few days after Intel was fined for having unfair prices and for giving rebates to PC makers by the European Union, Nvidia decided to give their opinion on the chip maker company.  The European Union decided to investigate Intel after AMD filed a report against them.

Jen-Hsun Huang, the CEO of Nvidia said that Intel chip pricing was unfair but said that they are not planning to file an antitrust action lawsuit against Intel for now.  Intel sells Atom chips for $45 for a single unit, but sells three-chip sets for $25.  The extremely discounted price for bulk units lures customers away from AMD.  “That seems pretty unfair,” stated Huang. “We ought to be able to compete and serve that market.”

“We compete fairly. We do not force bundles on any computer makers and customers can purchase Atom individually or as part of the bundle,” responded Intel spokesman Bill Calder. “If you want to purchase the chip set, obviously there is better pricing.”

[via Reuters]

Microsoft’s favorite government agency the European Union is no longer watching over the software giant full-time.  The European Commission stated that they no longer need a full-time trustee to make sure Microsoft is obeying the EU’s antitrust orders.  Microsoft has been sharing technical information with rivals that helps make their products compatible with Microsoft servers.

Neil Barrett, a computer science professor was appointed by the EU to assess Microsoft data.  Microsoft lost a legal battle in 2007 to the EU.  Microsoft had to give I.P. to rivals as a result.  Microsoft stated that they will remain committed to complying with the EU’s antitrust orders.

[via AP]

The European Union and Microsoft don’t have the best relationship.  I believe part of the reason why Microsoft made the .docx file format is because of pressure from the EU.  But the EU doesn’t want to stop there either.  They gave Mozilla a seat at the table for the antitrust case against Microsoft for packaging Internet Explorer exclusively with the Windows operating system line.

Mozilla was granted “third-party status” last week.  This gives them the option to voice objections and view confidential documentation regarding the case.  The European Commission is the executive arm of the EU and are the ones pushing for the case.  The case was initiated by Opera, who gave two months for Microsoft to respond to the allegations.  Opera is another browser company.

Mitchell Baker, chairwoman of Mozilla wrote that she agreed with the EC’s allegation that packaging IE with Windows harms competition and consumer choice. Here is a portion of Mitchell’s statements from her blog:

The extent of the damage is so great that it makes it difficult to figure out an effective and timely remedy. I believe it’s worth some effort to try. It’s easy to look at Firefox market share and assume the problem is gone or the damage is undone. But that’s not the case. The drag on innovation and choice caused by Microsoft’s actions remains. At Mozilla we work to reduce this drag through direct action, and the results are gratifying. If the EC can identify an effective remedy that also serves to improve competition, innovation and choice, I would find it most welcome.