For years we heard rumors about Dell receiving special treatment from chip giant Intel. After all it was a rather questionable plan for the then #1 PC manufacturer to keep selling Intel-based machines only, when there was an obvious market opening for AMD processors. In a class-action lawsuit
filed last week by investors, plaintiffs claim that Dell was secretly receiving up to $1 billion a year in kickbacks from Intel for not using competitor processors in any of their products. The news come shortly after Michael Dell announced his return as CEO, along with a plan to cut costs
, trimming bonuses and management positions.
This latest complaint adds Intel to the mix. It accuses Dell of taking up to $1 billion per year in payments from Intel in exchange for only using Intel CPUs in its laptops, desktops, and servers and says that Dell's "superior operating margins" were due in large part to "the hundreds of millions of dollars of secret and likely illegal rebate/kickback payments Dell was receiving from Intel at the end of each quarter in return for purchasing 100% or virtually 100% of its microprocessor requirements from Intel."