Massive EU Antitrust Fine Levied Against Intel

The European Commission has fined Intel 1.06 billion Euros—about $1.45 billion—for alleged anticompetitive actions against longtime rival AMD and enjoined any future such actions, report Reuters and the NY Times. The fine, a record, is more than double the one imposed on Microsoft in 2004, and 25% larger than a 2008 penalty against a glass maker for price fixing. Intel had no immediate comment, but is expected to appeal. Other tech companies facing EU antitrust scrutiny include Google, Cisco, Microsoft and IBM, with the latter two having actually been charged.

The size of the fine underscores the dominant role European regulators have adopted in antitrust, an area of law that somewhat faded from the U.S. radar screen over the last 30 years, especially during the mostly Republican administrations in that period. That quiescence will change under Obama, according to commentators and the new head of the Department of Justice’s Antitrust Division. In any case, antitrust enforcement is an increasingly global affair and, with antitrust laws in over 100 countries, one wonders whether an international treaty might one day emerge. The political obstacles, however, are probably formidable.

Blu-ray Wins

In the presidential campaign, the battle between blue states and red states hasn't yet begun, but in the DVD format wars, there's finally a victor, reports the New York Times (although the LA Times is a little less certain), and it's blue. Blu-ray, that is.

HD DVD suffered a quick succession of body blows: Last year, Target stores dropped HD DVD (though Target still sells the players and discs online ). Then, in the last six weeks, Warner Brothers, Best Buy, Netflix, and yesterday Wal-mart, in a coup de grace, each abandoned the format.

A question worth asking - and neither article does - is why Blu-ray prevailed. Perhaps because the discs have greater capacity, perhaps because the format (my sources tell me) have better technology, or perhaps even because the name is cooler (never underestimate the power of branding).

The other question, for Blu-ray and its backers, is how much of a window of opportunity they have to push their wares. On the one hand, many consumers may see little reason to upgrade their players and libraries for only an incremental improvement in quality. And on the other hand, digital downloads are growing in popularity, albeit slowly. The Blu-ray hardware companies will have to reduce their prices, and the studios will have to do likewise with disc prices, if they want to overcome consumer resistance, and establish significant market share before downloads become a real threat.

And not to forget the just-settled writers strike, the battle between discs and downloads will have an effect on writers residuals. See my article on DVD residuals and my analysis of the WGA deal (note discussions of download residuals and DVD residuals).

Meanwhile, Toshiba, the primary backer (and owner) of the HD DVD technology, is apparently not expected to withdraw the technology anytime soon - Microsoft still supports it, as do three studios - but the format war is over. According to the NY Times, Toshiba execs wouldn't even return calls.

Do You Yahoo!? Microsoft Does

Micrososft has made an usolicited offer to buy Yahoo!. Details are or will be available in your favorite newspaper or entertainment trade pub.

Microsoft Loses EU Antitrust Appeal

An EU court ruled that Microsoft must pay a $605 million fine imposed in 2004 by the EU Competition Commission, reports CNN / Money Magazine. The fine related to Microsoft's alleged efforts to use its market power in PC OS's as leverage in the market for media players and server OS's.

The ruling was criticized by Microsoft, which hasn't decided whether to appeal, and by the U.S. Assistant Attorney General for antitrust.

Expensive Book?

Facebook may be in play, reports Variety, and at a $10 billion valuation. (School yearbooks always cost too much.) Microsoft is dropping hints about spending $500 million for 5% of the company, and Google may try to outbid them. No other potential bidders are mentioned as likely. Over at News Corp, Rupert Murdoch must be happy that MySpace only cost him $580 million.

Big Changes Afoot in Patents?

The House has passed sweeping revisions to the patent laws, Bloomberg reports. The Senate has not yet acted on similar legislation. The House bill - which reflects Bush Administration input - would make patents harder to obtain and easier to challenge, and is supported by Microsoft, Intel, Cisco, Goldman Sachs, and others.

Microsoft & Machinima

The machinima blogosphere has been abuzz for the past two weeks with discussions of Microsoft's new Game Content Usage Rules. The new rules allow machinimakers to do their thing using a number of Microsoft video games, with a few restrictions. The devil is in the details, and negotiations are underway to loosen the new rules a bit.

Machinima, in case you're not a devotee, is the art of producing animated films using video games: instead of playing the game, the filmmaker (machinimaker) makes the characters interact with each other and records the interaction, adding dialog or a sound track.