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New York files antitrust suit against Intel

New York files antitrust suit against Intel

New York AG Andrew M. Cuomo has filed a federal suit against Intel, alleging anti-competitive activities.

Intel has come under fire from the New York Attorney General, who has filed an anti-trust suit against the company following allegations that it paid OEMs to maintain a monopoly on the processor market.

As reported over on CNet, Attorney General Andrew M. Cuomo states in the suit that "Intel has engaged in a systematic worldwide campaign of illegal, exclusionary conduct to maintain its monopoly power and prices in the market for x86 microprocessors."

The suit, which looks to "bar further anti-competitive acts by Intel, restore lost competition, recover monetary damages suffered by New York governmental entities and consumers, and collect penalties," further claims that "by exacting exclusive or near-exclusive agreements from large computer makers in exchange for payments totalling billions of dollars, and threatening retaliation against any company that did not heed its wishes, Intel robbed its competitors of the opportunity to challenge Intel's dominance in key segments of the market."

The federal antitrust suit comes after a prolonged Federal Trade Commission investigation into allegedly anti-competitive activities carried out by Intel, largely centered around denying its rival AMD an even playing ground in which to compete.

Intel's Chuck Mulloy disagrees with Cuomo's claims - naturally - stating that "neither consumers - who have consistently benefited from lower prices and increased innovation - nor justice are being served by the decision to file this case now," instead of back when AMD first raised a complaint about Intel's activities over four years ago.

With the European Union already having found Intel guilty of the offences alleged by this latest suit - and having fined the company a whopping £948 million - Intel could be in for a tough financial year if it doesn't manage to argue its case in front of a federal court.

Do you believe that Intel needs to be brought to task for its actions against its competitors, or is AMD simply trying to litigate where it can't innovate? Share your thoughts over in the forums.

16 Comments

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mjm25 5th November 2009, 12:59 Quote
intels CORE architecture was superior anyway... but it all hinges on whether AMD could've made more of a fight if it could have made more cash from a more even playing field... hmmmmmmmmmmm and so on
yakyb 5th November 2009, 13:25 Quote
this all occured before core came out when the XP was dominant over the P4
Star*Dagger 5th November 2009, 14:46 Quote
The EU leads the way again. If the states and Federal govt follow the EU's lead, Intel and M$ are doomed, and that would be a great day for the PC platform.

There should be at least 10 Win compatible OSes out there and at least 4 or 5 companies making x86 chips.
We are in a mini Dark Age with regards to the PC platform and operating Systems.

Yours in more options Plasma,
Star*Dagger
Cerberus90 5th November 2009, 14:59 Quote
Yeah, I remember reading that Intel had paid Dell to stay P4 exclusive, even though the AMD chips at the time were far superior.

But, if its true, then yes, I think Intel should be punished.

It would benefit enthusiasts if there were more OS' and more chip makers, but for the general public who don't know the difference between Intel and AMD, it would make choosing a computer even more difficult, especially with the quality of staff in most places like PC World, Dixons and Currys etc.
But its still not right, when theres only two options, it should not be allowed that option 1 can use its massive profits to try and exterminate option 2. Whatever the product is.
knutjb 5th November 2009, 16:13 Quote
Intels deliberate starving AMD of market share through well documented cases has at the same time hurt the consumer of both price and advancement. I think Intel is attempting to stifle AMDs tech advancement so it could R&D new tech to effectively patent AMD out of the CPU market. AMD hangs on through its 64 bit on chip controler patents. If Intel can get a jump on the next generation and the patents that go with it they might throw AMD out of the CPU market. That would be bad for all of us.

Intel might see this as a cheap price for long term dominance. Money and power are in the patents not the end product.
The_Beast 5th November 2009, 17:04 Quote
Quote:
Originally Posted by Star*Dagger
There should be at least 10 Win compatible OSes out there and at least 4 or 5 companies making x86 chips.
We are in a mini Dark Age with regards to the PC platform and operating Systems.

Yours in more options Plasma,
Star*Dagger

I kinda doubt that, it would be hard to start up a CPU manufacturing plant just like that and have people buy them. Most people I talk to don't even know what AMD is
Sebbo 5th November 2009, 23:49 Quote
sure, being anti-competitive is bad and all, but i don't think this suit is quite right. If Intel loses, the main result isn't going to be that lost competition is restored, its that the state of NY is going to get a big fat payment, and Intel's next R&D budget won't be as big. If AMD actually got to see any of the money that results from this, then i'd feel differently, but i'm with Chuck on this one: filing this now just isn't going to benefit the right people
LucusLoC 6th November 2009, 00:20 Quote
@star dagger

mind boggling. you think the EU taking 1trillion from Intel is going to help the market? is the EU going to invest that money into chip design? and you think that the 2 companies who have lead the way the most in development and innovation would benefit the PC if they died? really? i suppose mac and Linux are just going to build working and fully integrated business systems overnight? or suddenly support all the standards used by gaming companies to help simplify their development and keep costs down?

as to Intel buying off dell, so what? Intel and dell are making a business choice, Intel is spending money to maintain exclusive ties to dell. dell weighs the costs and decides it likes the money more than providing its consumers more choice. in doing so it looses all customers who wanted to buy AMD, and a few customers who just don't like that kind of deal. fair enough.

there are a couple of ways amd can handle this:
1. leverage its higher profit margins per chip and run some advertising,
2. sign its own exclusive deal with someone else,
3. drop the price on its chips and make dell sorry they signed the contract buy giving dells competitors cheaper chips
and probably a few others i have not though of.

all of the above still benefits the consumer. #1 increases consumer awareness and #2 and #3 both bring the consumer cheaper goods.

if you say that amd was not capable of doing this because of X then my question to you is why was Intel capable of doing it? how did Intel overcome X? were they smarter? more innovative? did they leverage their assets better? if your answer is just "their bigger" i still want you to tell me how they got bigger. it probably leads back to one of the above. now tell me why we should punish the more successful company just because they are more successful.

again, their is nothing illegal with what Intel did. as a matter of apple does it all the time. tell me again why everyone is not suing apple?
LucusLoC 6th November 2009, 00:21 Quote
@star dagger

mind boggling. you think the EU taking 1trillion from Intel is going to help the market? is the EU going to invest that money into chip design? and you think that the 2 companies who have lead the way the most in development and innovation would benefit the PC if they died? really? i suppose mac and Linux are just going to build working and fully integrated business systems overnight? or suddenly support all the standards used by gaming companies to help simplify their development and keep costs down?

as to Intel buying off dell, so what? Intel and dell are making a business choice, Intel is spending money to maintain exclusive ties to dell. dell weighs the costs and decides it likes the money more than providing its consumers more choice. in doing so it looses all customers who wanted to buy AMD, and a few customers who just don't like that kind of deal. fair enough.

there are a couple of ways amd can handle this:
1. leverage its higher profit margins per chip and run some advertising,
2. sign its own exclusive deal with someone else,
3. drop the price on its chips and make dell sorry they signed the contract buy giving dells competitors cheaper chips
and probably a few others i have not though of.

all of the above still benefits the consumer. #1 increases consumer awareness and #2 and #3 both bring the consumer cheaper goods.

if you say that amd was not capable of doing this because of X then my question to you is why was Intel capable of doing it? how did Intel overcome X? were they smarter? more innovative? did they leverage their assets better? if your answer is just "their bigger" i still want you to tell me how they got bigger. it probably leads back to one of the above. now tell me why we should punish the more successful company just because they are more successful.

again, their is nothing illegal with what Intel did. as a matter of apple does it all the time. tell me again why everyone is not suing apple?
Shagbag 6th November 2009, 00:52 Quote
I enjoy reading these kind of threads because it always amazes me how many morons there are out there that really believe unregulated monopolies are a good thing for consumers.
Quote:
tell me again why everyone is not suing apple?
It's because Apple don't have a monopoly position in the market like Microsoft and Intel do. I suggest you go down to your nearest University book store and buy a book in basic economic theory. It will serve you well for the future and stop you looking like an idiot.
LucusLoC 6th November 2009, 01:33 Quote
last i checked neither intel nor microsoft were a monopoly. they are dominant in the market, but they do not hold monopoly power. amd has been able to hurt intel in the past, and have many loyal buyers. microsoft is in a better position to take monopoly control over its sector, but i doubt it would actualy be able to pull that off, since there are so many other options out there, as well as quite a few people willing to work for basicaly free as long as it gives them the chance to "get back at the man." all of these are well and good, and give the dominant player in the market place reason to pause.

in short it is not a monoply if there are other viable options. they did get to be dominant because they made better products, all things considered, in the eyes of most people and buisnesses. again, why should they be punished for this? and why should there be different rules for appple just because they are smaller?

also, you did not adress any of my other points. they are relevant to the converstaion.

most basic ecconomic books will tell you not to punish the sucessful, because it will give them less incentive to keep on being sucessful.
knutjb 6th November 2009, 05:00 Quote
Quote:
Originally Posted by LucusLoC
@star dagger


as to Intel buying off dell, so what? Intel and dell are making a business choice, Intel is spending money to maintain exclusive ties to dell. dell weighs the costs and decides it likes the money more than providing its consumers more choice. in doing so it looses all customers who wanted to buy AMD, and a few customers who just don't like that kind of deal. fair enough.

again, their is nothing illegal with what Intel did. as a matter of apple does it all the time. tell me again why everyone is not suing apple?

Uhh everything you described violates anti-trust laws in the US. The market Dell was pissed off about wasn't loonies like you, you're pennies on billions. It was the server business. During that time frame AMD was a cash cow, if you could sell it... Michael Dell had to come back to run the company because it was doing poorly. In business if you hold the majority of a market, say >50% you're going to have a lot of eyes on your practices. Historically companies that have had that much control over a market tried to eliminate all competition. Don't know why but that seems to be the trend. You can be successful when you follow the rules.
Shagbag 6th November 2009, 09:35 Quote
Quote:
Originally Posted by LucusLoC
last i checked neither intel nor microsoft were a monopoly.
When was that, 1984?
impar 6th November 2009, 09:49 Quote
Greetings!
Quote:
Originally Posted by LucusLoC
last i checked neither intel nor microsoft were a monopoly. they are dominant in the market, ...
Exactly. And the behaviour both entities you mention were performing is called abuse of a dominant position. An illegal activity in all competition legislation.

Also, there is no link to this thread in the article.
Star*Dagger 7th November 2009, 18:29 Quote
It is always funner when industry insiders post on forums and expect people to take their "opinions" as random.

Busted.
leslie 7th November 2009, 20:58 Quote
Quote:
Originally Posted by The_Beast
I kinda doubt that, it would be hard to start up a CPU manufacturing plant just like that and have people buy them. Most people I talk to don't even know what AMD is

Most people don't know what part of a computer Intel makes either.

Most had no idea who Cyrix was or AMD, yet people still do and did buy them. People buy a computer, if it works, and it's cheap they will buy it (if it has Windows). The x86 license for Cyrix is still out there, and can be purchased (VIA controls it at the moment), everyone assumed Nvidia was going to make a bid for it and produce an x86 chip.

As for starting a chip company, the x86 license is the biggest holdout (which is arguably anti-competetive in itself as Nvidia recently found). Manufacturing is not an issue nearly as much as you think. IBM, Nvidia, and several others (Motorola?) all have the fabrication abilities.
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