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Intel pays $6.5 million in New York antitrust case

Intel pays $6.5 million in New York antitrust case

Ottelini's got good reason to smile: the New York antitrust case has cost Intel a mere three hours' profit.

Intel has finally settled a three-year antitrust case brought on behalf of the state of New York by then-attorney general and current governor Andrew Cuomo for $6.5 million.

In the 2009 lawsuit, Cuomo accused Intel of a 'systematic worldwide campaign' of anticompetitive activities including, but not limited to, massive subsidies, incentives and kickbacks totalling billions of dollars if customers chose Intel chips over rival processors from the likes of AMD.

When the carrot didn't work, Cuomo claimed Intel turned to the stick. For manufacturers who refused to play ball and chose to stock machines with non-Intel processors, prices were suddenly hiked and stock constrained so as to put a squeeze on shipment times and margins.

The lawsuit originally looked for triple damages calculated over a period of four to six years. Sadly for New York's coffers, Judge Leonard Stark limited the claim to standard damages and a three-year period. As a result, the settlement has come to a mere $6.5 million.

Okay, so that might sound like a lot, but let's put it into perspective: the company's profits for 2011 totalled $12.9 billion. As a result, the $6.5 million settlement shaves a mere 0.05 per cent off that total. To put it another way, the company has lost just over three hours' profit.

Additionally, the terms of the settlement mean that Intel has been able to end the lawsuit without having to admit wrongdoing. As a result, if anyone else feels like having a go at Intel they won't be able to use this case as evidence of monopolistic activities.

This isn't the first time Intel's been slapped over its allegedly anticompetitive nature. Back in 2009, the European Union hit the company with a £948 million fine for the self same activities of which Cuomo complained.

At the time, competition commissioner Neelie Kroes claimed that 'Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated.'

The state of New York has indicated its displeasure with such a lightweight punishment for Intel, especially given the prior weight of the EU's fine, but has declared that it won't be contesting the ruling.

23 Comments

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Woollster00 10th February 2012, 11:44 Quote
Lol. I love intel. enough said.
Guinevere 10th February 2012, 11:52 Quote
So we paid more than we should have but didn't have to buy an AMD chip. Shame about the price issue but every cloud has a silver lining ;)
rollo 10th February 2012, 13:00 Quote
6.5mil dollars to intel isnt even a slap on a wrist

they probably pay out more in parking fines than that is worth to them
XXAOSICXX 10th February 2012, 13:59 Quote
"For manufacturers who refused to play ball and chose to stock machines with non-Intel processors, prices were suddenly hiked and stock constrained so as to put a squeeze on shipment times and margins."
Quote:
Originally Posted by Woollster00
Lol. I love intel. enough said.

You wouldn't love Intel so much if you were fired from the company you were working hard for because of cut-backs due to Intel's illegal business practices, or does your simple mindedness prevent you from liking a product at the same time as understanding the process by which it arrived on your desktop and to empathise with those companies who were made to suffer as a result.

Idiot.
Hardware150 10th February 2012, 14:47 Quote
This is all conjecture but imagine if intel played fair back then, and more people bought AMD chips. If AMD put the extra money into R&D back then maybe they would be on a more level playing field with intel now, and with AMD more competative we may have cheaper Intel chips, which would have been better all round for both consumers and AMD (although intel would have slightly less profits, with the obscene amounts that they currently make it wouldn't really effect Intel even if AMD took 10% of the profits).

Alas AMD has been knocked back from the glory days of the Athlon 64, Intel can charge anything they want for the top end chips and there profits show this, and its us the consumer thats suffering for it. Also yes i know this lawsuit dates back to before the Athlon 64, but with more money AMD could have potentially advertised more, and got more system builders on board with lower prices, maybe more people would have bought them instead of those awful extreme edition Intels running netburst, and AMD would be in a more healthy position now (again all conjecture).

Anyway enough ranting about what could have been, this lawsuit hasn't even scratched Intels profits, and i doubt theres anyone who cares about there uncompetitive practices in the past because they have the best chips, so Intel will carry on as if nothing happened.
schmidtbag 10th February 2012, 15:23 Quote
for those of you praising intel right now, you have some serious ethical and moral problems. like stated earlier, you probably wouldn't hate companies like amd if they ever got a chance to keep up. and this isn't just about amd either, this impacts the server market where oracle, ibm, and nvidia are hurt too. if it weren't for ibm, intel would've been a no-name company yet intel is trying to push ibm out of the cpu market.

i think its a shame it had to take this long for the lawsuit to complete. and sure $6.5 may be nothing for intel but at this point its more than just the money. i think its too late though - intel's anti-competitiveness has pretty much etched their success in stone for future years.
DwarfKiller 10th February 2012, 16:20 Quote
So what should be a slap in the face and usually ends up as a slap on the wrist, ended up being nothing more than a flick on the arm?!
Typical.
west 10th February 2012, 16:59 Quote
Intel is just trying to make money like every other company out there. They are just doing very well at it. If they didn't dominate CPU markets no one would care if they did exactly what they are doing now (and in the past). This is capitalism, get over it or vote for someone else.
Woodspoon 10th February 2012, 17:16 Quote
Quote:
Originally Posted by west
Intel is just trying to make money like every other company out there. They are just doing very well at it. If they didn't dominate CPU markets no one would care if they did exactly what they are doing now (and in the past). This is capitalism, get over it or vote for someone else.

Capitalism does not extend to the use of illegal business tactics.
Waynio 11th February 2012, 02:33 Quote
If I caught news of this before I upgraded to sandybridge I'd have switched over to AMD, at least the mini-ITX I'm going to get is AMD. :D
schmidtbag 11th February 2012, 02:55 Quote
Quote:
Originally Posted by Waynio
If I caught news of this before I upgraded to sandybridge I'd have switched over to AMD, at least the mini-ITX I'm going to get is AMD. :D

i assume you aren't aware of the several other amd vs intel lawsuits related to anticompetition? intel has been trying to snuff out amd for over a decade. considering that amd is like... 1/10th the size of intel, i'd say they're doing a REALLY good job, and i think people seem to forget that when you compare amd's financial situation vs their product releases to intel's they're kinda doing a better job proportionally. if amd had intel's income for 1 year i'm sure they'd come out with something better than w/e ivy bridge will be.
Waynio 11th February 2012, 03:11 Quote
Quote:
Originally Posted by schmidtbag
i assume you aren't aware of the several other amd vs intel lawsuits related to anticompetition? intel has been trying to snuff out amd for over a decade. considering that amd is like... 1/10th the size of intel, i'd say they're doing a REALLY good job, and i think people seem to forget that when you compare amd's financial situation vs their product releases to intel's they're kinda doing a better job proportionally. if amd had intel's income for 1 year i'm sure they'd come out with something better than w/e ivy bridge will be.

You assume correct mate & absolutely for the budget difference between intel & AMD, I'd say AMD are absolutely badass at what they do, this isn't a fanboy move it's choosing a very smart & strong underdog who has been losing out to a wealthy bully. :)

Colour me red & call me an AMD fanboy now then if you wish, I don't care. :D My first few PC's were AMD based also, I can bare a slightly underperforming rig until they start beating the crap out of intel on performance, if people support AMD it won't take them long I bet. :)
schmidtbag 11th February 2012, 04:45 Quote
Quote:
Originally Posted by Waynio
You assume correct mate & absolutely for the budget difference between intel & AMD, I'd say AMD are absolutely badass at what they do, this isn't a fanboy move it's choosing a very smart & strong underdog who has been losing out to a wealthy bully. :)

Colour me red & call me an AMD fanboy now then if you wish, I don't care. :D My first few PC's were AMD based also, I can bare a slightly underperforming rig until they start beating the crap out of intel on performance, if people support AMD it won't take them long I bet. :)

well, there's a point where getting the most high-end stuff doesn't even benefit you anymore. i still have an overclocked athlon II x3 that i use for gaming and i still have yet to utilize 100% of it (although, my HD5750 might be a bottleneck). i considered getting a phenom x6 but i haven't found a need to. so why should i care to pay so much more for an 8-threaded cpu? i rarely do super-cpu intensive tasks such as movie encoding, and even if i did, i don't need the extra few seconds.
Bloody_Pete 11th February 2012, 08:23 Quote
One thing that none of this mentions is that for the years in question AMD basically sold every chip it produced... So I don't think Intel really had that big an impact...
The_Beast 11th February 2012, 09:57 Quote
Intel gets fined 6.5 million, lol


that's like fining Bill Gates $10 for a parking ticket
ssj12 12th February 2012, 00:59 Quote
Quote:
Originally Posted by Woodspoon
Quote:
Originally Posted by west
Intel is just trying to make money like every other company out there. They are just doing very well at it. If they didn't dominate CPU markets no one would care if they did exactly what they are doing now (and in the past). This is capitalism, get over it or vote for someone else.

Capitalism does not extend to the use of illegal business tactics.

Capitalism does encompass the choice of doing business with said company or not. If you believe Intel isnt the best choice, take your business to AMD or ARM.
fluxtatic 12th February 2012, 03:45 Quote
Quote:
Originally Posted by ssj12
Quote:
Originally Posted by Woodspoon
Quote:
Originally Posted by west
Intel is just trying to make money like every other company out there. They are just doing very well at it. If they didn't dominate CPU markets no one would care if they did exactly what they are doing now (and in the past). This is capitalism, get over it or vote for someone else.

Capitalism does not extend to the use of illegal business tactics.

Capitalism does encompass the choice of doing business with said company or not. If you believe Intel isnt the best choice, take your business to AMD or ARM.

Are you being deliberately simple-minded? You can't build desktops on ARM (especially back when Intel was at their worst in this regard.) Had one of the major OEMs bailed on Intel (HP, for example), Intel would have turned around and financed a massive ad campaign for every other OEM to pile on HP for not using Intel's 'superior processors' (depending on the generation, that may or may not have been true) and cut advertising kick-ins (I can't recall the exact term, but it goes on in every industry.)

Do you think it's that Intel is so much more exciting that the chain store ads feature Intel-based machines almost exclusively? No, it's Intel kicking in dollars in advertising to the OEMs. Even companies that aren't hurting for money aren't going to turn down free money from a vendor, in exchange for meeting some conditions. Those conditions being, back in the bad old days, "don't buy AMD", or "AMD can't be more than x% of machines you build". Obviously, AMD can't kick in nearly what Intel could, so they get relegated to the low-end machines in the ads to draw in the lower-end segment.

It's dumbass, simpleton attitudes like yours that are turning capitalism into the unholy mess it is now. (Doubly true for west's comment, as well.)
ssj12 12th February 2012, 06:49 Quote
Quote:
Originally Posted by fluxtatic
Quote:
Originally Posted by ssj12

Capitalism does encompass the choice of doing business with said company or not. If you believe Intel isnt the best choice, take your business to AMD or ARM.



Are you being deliberately simple-minded? You can't build desktops on ARM (especially back when Intel was at their worst in this regard.) Had one of the major OEMs bailed on Intel (HP, for example), Intel would have turned around and financed a massive ad campaign for every other OEM to pile on HP for not using Intel's 'superior processors' (depending on the generation, that may or may not have been true) and cut advertising kick-ins (I can't recall the exact term, but it goes on in every industry.)


Do you think it's that Intel is so much more exciting that the chain store ads feature Intel-based machines almost exclusively? No, it's Intel kicking in dollars in advertising to the OEMs. Even companies that aren't hurting for money aren't going to turn down free money from a vendor, in exchange for meeting some conditions. Those conditions being, back in the bad old days, "don't buy AMD", or "AMD can't be more than x% of machines you build". Obviously, AMD can't kick in nearly what Intel could, so they get relegated to the low-end machines in the ads to draw in the lower-end segment.

It's dumbass, simpleton attitudes like yours that are turning capitalism into the unholy mess it is now. (Doubly true for west's comment, as well.)

Do you not understand what capitalism promotes? Its CONSUMER CHOICE.

And what exactly does consumers choosing to buy AMD over Intel, and actually ARM is getting into desktop with W8 and currently can be bought for servers, have anything to do with OEMs? If customers buy more AMD processor based products, AMD's market grows and Intel's shrinks. No OEM has to "drop Intel" even if more people select AMD based products..

Nice job trying to refute people have choice in what they purchase, guess you support communism?
Anfield 12th February 2012, 08:43 Quote
[QUOTE=ssj12]
Quote:
Originally Posted by fluxtatic

And what exactly does consumers choosing to buy AMD over Intel, and actually ARM is getting into desktop with W8 and currently can be bought for servers, have anything to do with OEMs? If customers buy more AMD processor based products, AMD's market grows and Intel's shrinks. No OEM has to "drop Intel" even if more people select AMD based products..

That does not apply to this particular case, simply put, the cases regarding Intel supposedly blocking the use of AMD Cpus date back to the time when AMD had a competitive product with K8, what everyone seems to forget is that AMD could not even keep the demand for K8 satisfied, imagine the stock problems they would have had if Dell, HP, Acer and so on had ordered K8 by the truckload.
It takes years to build new fabs, point being that by the time AMD would have had sufficient production capacity Conroe would have been released anyway.
Denbarr 12th February 2012, 15:04 Quote
Quote:
Originally Posted by Bloody_Pete
One thing that none of this mentions is that for the years in question AMD basically sold every chip it produced... So I don't think Intel really had that big an impact...

Actually because of Intels tactics during that period, AMD couldn't move a few million units they held in reserve for big companies like dell and others. Stock that ended had to be heavily discounted and be sold to third parties, because the original customers had cold feet and decided not to buy the chips they ordered
Denbarr 12th February 2012, 15:13 Quote
All of this doesn't matter anymore, it can't be undone. Damage done to AMD is so bad now that they doing whatever they can to avoid battling Intel as best as they can. Be thankful that ARM and NVIDIA is coming into the picture, the large percentage of PC consumers can look forward cheap alternative that would fit all their needs.
ssj12 13th February 2012, 03:07 Quote
[QUOTE=Anfield]
Quote:
Originally Posted by ssj12
Quote:
Originally Posted by fluxtatic

And what exactly does consumers choosing to buy AMD over Intel, and actually ARM is getting into desktop with W8 and currently can be bought for servers, have anything to do with OEMs? If customers buy more AMD processor based products, AMD's market grows and Intel's shrinks. No OEM has to "drop Intel" even if more people select AMD based products..

That does not apply to this particular case, simply put, the cases regarding Intel supposedly blocking the use of AMD Cpus date back to the time when AMD had a competitive product with K8, what everyone seems to forget is that AMD could not even keep the demand for K8 satisfied, imagine the stock problems they would have had if Dell, HP, Acer and so on had ordered K8 by the truckload.
It takes years to build new fabs, point being that by the time AMD would have had sufficient production capacity Conroe would have been released anyway.

You are missing the point. The original commenter "West" stated that Intel is dominated the market, da. Why? because people buy their products. They couldnt be where they are if we the consumer didnt vote who we want to dominate the market with our wallets. Intel can only open fabs if they have the money, give to them buy the consumers. Consumers being OEMs who only order processors based off demand, and builders like us posting on this site. If AMD was given the amount of business back then that was given to Intel the market would be entirely flipped around and AMD would have more fabs, and Intel probably wouldnt have had the money to design Conroe.

Would we the customer take notice if AMD was doing the same thing? idk. Probably. If Intel had smaller marketshare then AMD and tried this, would we be complaining? probably not as most people would be saying the same thing we do with AMD now since AMD is the "little guy."

If you want to get AMD's marketshare to grow and have the money to open more Fabs, buy AMD processors and get people to buy OEM products with AMD inside.

The market, business cycles, and a capitalistic society determines what businesses live, die, and grow by those who use their money to buy a company's products.
Woollster00 13th February 2012, 22:46 Quote
Quote:
Originally Posted by XXAOSICXX
"For manufacturers who refused to play ball and chose to stock machines with non-Intel processors, prices were suddenly hiked and stock constrained so as to put a squeeze on shipment times and margins."
Quote:
Originally Posted by Woollster00
Lol. I love intel. enough said.

You wouldn't love Intel so much if you were fired from the company you were working hard for because of cut-backs due to Intel's illegal business practices, or does your simple mindedness prevent you from liking a product at the same time as understanding the process by which it arrived on your desktop and to empathise with those companies who were made to suffer as a result.

Idiot.

Implying those reasons are the reasons why i love intel implying you understand my comment which was actually sarcastic implying you have the right to call me an idiot The only idiot here is you don't just go round insulting people.
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