Attorney General of NY files suit against Intel for Monopolization

Overheal

http://consumerist.com/5397053/ny-ag-intel-is-an-illegal-monopoly-that-uses-bribery-and-coercion?skyline=true&s=i

It is the Attorney General's conclusion that Intel secured its absurdly large market share through bribery and coercive actions.

I completely agree.

If you remember the Windows Vista 'Capable' scandal. Which in turn, absolutely gutted the reputation of that entire Operating System. A lot of that had to do with Intel coercing Microsoft to lower its Minimum Requirements rating so Intel could burn through its old inventory of outdated motherboard chipsets and meet its quarterly earnings. Microsoft was of course totally at fault to agreeing to it, but Intel is far from innocent either.

Gizmodo.com wrote:

Andrew Cuomo, the Attorney General of New York, has filed a lawsuit against Intel, claiming that the company is an illegal monopoly that engages "in a worldwide, systematic campaign of illegal conduct - revealed in e-mails - in order to maintain its monopoly power and prices in the market for microprocessors." From the NY AG's office:

"Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market," said Attorney General Cuomo. "Intel's actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices. These illegal tactics must stop and competition must be restored to this vital marketplace."
To obtain exclusive agreements, Intel paid hundreds of millions of dollars annually - and in some years billions of dollars - in so-called "rebates" to individual computer makers. These rebates were actually just payoffs with no legitimate business purpose that Intel invented to disguise their anticompetitive nature. Intel also attempted to erase the most obvious traces of its anticompetitive scheme by eliminating crucial but flagrantly objectionable provisions from written agreements or by camouflaging language about illegal guaranteed market shares with terms like "volume targets."

As for how this affects you, the consumer, the AG's office says that "Intel repeatedly pressured computer makers to guarantee it specified market shares of their sales, which prevented computer makers from responding to consumer demand."
The AG's office quotes some internal emails from Dell, HP and Intel in which alleged "anti-trust" activity is discussed. For example this is from an internal e-mail from HP executive in June 2004 after HP defied Intel and launched an AMD product: "Intel has told us that HP's announcement on Opteron [AMD's server chip] has cost them several $B [Billions] and they plan to ‘punish' HP for doing this."
And here's another one in which a HP executive discusses the possible repercussions for using another company's products:
"If you do and we get caught (and we will) the Intel moneys (each month is gone (they would terminate the deal). The risk is too high. Without the money we do not make it financially."
Here's the breakdown of how the AG's office says different computer makers were paid off by Intel to guarantee market share and keep businesses from using their competitor's products:

Dell
* In 2006, Intel paid Dell almost $2 billion in "rebates," and in two quarters of that year, rebate payments exceeded Dell's reported net income
* From 2001 to 2006, Intel granted Dell a privileged position vis-à-vis other computer makers in return for Dell's agreement not to market any products from Advanced Micro Devices ("AMD") (NYSE: AMD), Intel's major competitor
* Intel and Dell collaborated to market microprocessors and servers at prices below cost in order to deprive AMD of strategically important competitive successes
HP
* Intel threatened HP that it would derail development of a server technology on which HP's future business depended if HP promoted products from AMD
* Intel paid HP hundreds of millions of dollars in rebates in return for HP's agreement to cap HP's sales of AMD-based products at 5% of its business desktop PCs
* In 2006, Intel and HP entered into an broader, company-wide agreement to pay HP $925 million to increase Intel's shares of HP's sales at AMD's expense
IBM
* Intel paid IBM $130 million not to launch an AMD-based server product
* Intel threatened to pull funding for joint projects that benefited IBM if IBM marketed AMD-based server products
* Intel pressured IBM to launch another AMD-based server only on an "unbranded" basis

The NYT says that Cuomo's suit is the "first formal antitrust action against Intel by any government agency in the United States in more than a decade."
ATTORNEY GENERAL CUOMO FILES ANTITRUST LAWSUIT AGAINST INTEL CORPORATION, THE WORLD'S LARGEST MAKER OF MICROPROCESSORS [NY AG]
Full Complaint (PDF) [NY AG]

Biggins

Himmm... it will be interesting to watch how this one drags out.

Cuddlesworth

Considering our old xp image magically had all ability to use AMD processors removed I'm not that surprised by the above. Somebody got a large rebate for that.

leninbenjamin

heh, came here to post that.

And they still owe the EU $1.45 billion over May's lawsuit.

I love my i7, but Intel really do need to be brought into line for the Vista thing. Not too badly though, we don't want Leixlip to bail on us.

Bob_Harris

I've always been somewhat of an AMD fanboy.

No shame in admitting it now :pac:

PogMoThoin

leninbenjamin wrote: »

.................... we don't want Leixlip to bail on us.

Thats the thing, Intel spent billions, in the depts of the worldwide recession, on their manufacturing plant in Texas. Their long term plans don't include Ireland I'm afraid.

leninbenjamin

PogMoThoin wrote: »

Thats the thing, Intel spent billions, in the depts of the worldwide recession, on their manufacturing plant in Texas. Their long term plans don't include Ireland I'm afraid.

I know. But til then, we need to keep those factories open as long as possible...

Overheal

In light of this I feel we should ask the question: is it possible AMDs are actually better or highly competitive to Intel?

MickH503

PogMoThoin wrote: »

Thats the thing, Intel spent billions, in the depts of the worldwide recession, on their manufacturing plant in Texas. Their long term plans don't include Ireland I'm afraid.

Intel doesn't have a wafer fab in Texas ...

PogMoThoin

MickH503 wrote: »

Intel doesn't have a wafer fab in Texas ...

Can You guaraneee they're still gonna be here in 5 yrs?

MickH503

PogMoThoin wrote: »

Can You guaraneee they're still gonna be here in 5 yrs?

There's only one thing guaranteed in life ... but FWIW I reckon they will still be here in 5 years ..

BopNiblets

Intel Fab 68 in Dalian China is supposedly operational next year, bye bye Leixlip.

Bob_Harris

BopNiblets wrote: »

Intel Fab 68 in Dalian China is supposedly operational next year, bye bye Leixlip.

And there was Intel calling for a Yes to Lisbon with a strong undertone of "we'll stay if you vote yes".