Dell prepares for antitrust settlement
Dell has put aside a massive $100 million fund in case it has to settle an antitrust action.
According to a report over on Engadget, which quotes Dell's own Financial News page as its source, Dell's move comes as a result of fears that its collaboration with Intel - which saw Dell accept the chip giant's offered rebates in return for refusing to work with other CPU manufacturers including AMD - will come back to bite it in the behind.
With Intel having been fined by the EU and the FTC over its anti-competitive practices, it makes sense for Dell to put some money aside in case the company's competitors decide that the companies accepting the cash to exclude AMD and others from fairly competing should be punished in the same way as the company offering the 'rebates.'
Dell will now be left with a difficult choice: with the fund set aside, it has the opportunity to pre-empt an investigation into its actions by volunteering to pay restitution to those that it has wronged with its actions, which could save it an impressive amount of money in the long term. However, by admitting culpability it can kiss goodbye to the $100 million with no chance of defending itself or reducing the damages in an appeal situation - something that is unlikely to please investors.
Do you believe that Dell should be held culpable for its working with Intel to exclude rivals including AMD from the marketplace, or were its actions simply the result of trying to get the best possible margin for its shareholders and thus beyond reproach? Share your thoughts over in the forums.
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Discuss in the forums ReplySo being biased, here's hoping that Dell get nailed with a massive fine. Bigger than $100m, please
If a campany thinks some part or tecnologie is better for it's products why they can't use it???
Case closed?
But they're not better in all sectors and this goes back to when X2s where hot sh*t.
Well, actually it's not. You see, the argument can be made that Dell colluded with Intel by accepting what amounts to bribes in order to stifle out the competition. At the time this was going on Intel's CPU's were not better than AMD's in any way, so AMD's would have been the obvious choice for anyone building a PC.
Knowing this was the case, but not wanting AMD to gain market share Intel used it's considerable cash reserves to entice companies away from using their rival's better product. This not only harmed AMD but also the consumer by fostering a view that Intel was still superior, otherwise why would Dell be using them etc.
As an analogy, say I had been the main manufacturer of bicycles for a long time and you started a company and made better bicycles for less money. Now what if I, seeing this, used my money to bribe retailers not to stock your bikes? Would that not amount to anti-competitive practices, harming both you and the consumer?
I think the bottom line is that Dell should be able to use what components it likes.
Surely if anything, Intel should be liable and not Dell.
Am I reading this all wrong or something?
I know the story, AMD already got money and tecnology from Intel and that was a good move from Intel to not pay an even bigger fine. Now if this is an anticompetitive practice (i know it is) look what Apple has been doing in recent years??
What do you mean?
They are doing things they're way while Google and Microsoft have to obey to rules, in other point of view its an "anticompetetive practice" or simply isn't fair...
How can Apple sue every one the way they are doing?
What is the real reason why they don't use flash tecnology? or its just because the HTML 5 is coming???...
Remember when the iPod came out had the same OS interface of the Creative Zen, they paid a miserable fine and get way with it??
However, now that Apple has officially overtaken ms, we might start seeing some pressure on them.
As for apple suing people left right and centre - unfortunately, we have created a legal and social environment where not only is that possible and acceptable, it works, too.
Sure, they can use any components they like in their products, but the fact is they accepted bribe money to use inferior components in their products. If you ask me, Dell should get fined even more than Intel. Intel screwed over AMD, but Dell screwed over anyone buying one of their PCs, and helped Intel screw over AMD.
Amen to that
Anyway, I'm rambling.
This sort of a thing is common, but usually not on as large of a scale. Easiest example I can think of is soft drink companies at food service companies. When a restaurant or cafeteria makes a deal with a drink vendor, usually part of the deal is that they will ONLY serve drinks from that vendor. There are a few exceptions, but 90% of restaurants serve either all Coke products, or all Pepsi products. I would assume that there is some sort of financial incentive offered by each vendor to a customer that is willing to buy exclusively from that vendor (otherwise why would they?) but that's just speculation on my part.
Either way, there are definitely some agreements I've seen in other industries where companies will 'partner' and exclusively distribute their partner's products and not their competitors, but I'm not sure if there was a financial incentive or not.
And yes, it's as easy as saying that Intel is better than AMD, or vice-versa. There have been many flips. Back in the day, Athlon XPs were much faster than Pentium 4s, and overclocked better, and could unlock their multipliers by using a pen on the chip. Then Hyperthreading came out, and the focus switched back to Intel. Then AMD got 64-bit first, and the Athlon 64 was the best. Then AMD had dual-core first, and it was firmly in the lead. Then Intel came out with Core 2 Duo, and took it back. Again, I'm rambling, but Intel's current dominance is a relatively recent development, and Dell has been Intel-exclusive through those days of AMD superiority.
Never came thru my head, but that is the best and simple example of whats going on and its the end of it. If Dell is sued all restaurants and cinemas should be to.
"anticompetetive practice" yea right, is been like that since the stone ages.
One of the main reasons for this is that these restaurants have a limited amount of storage space, and in order to get the deals you have to by a certain quantity. most simply doesn't have the space/turnover required to have several brands.
At least that is the reason where I work. and some larger places does have both Pepsi cola and Coca cola.
Bravo, one of the best to understand summaries of this issue i've heared in a long time ;)
dell didn't have to take the offer, but they would have had to pay the standard price.
OTOH, I doubt it was just a rebate as that wouldn't stop dell from stocking amd's offerings. It sounds more like an exclusivity deal.
like
Paying for the R&D of new projects.
Prohibiting the other vendors from using their products. etc.
and what not.
That may be business but in my opinion not fair. AMD had been a rival and I mean, a good one. Still in effort to take the competition to avoid monopoly. I've been an Intel fan and still am but fair practices should be promoted and the unfair should be declined. So if DELL is among the one promoting it, then so be it.