Intel hit with another antitrust suit for competing unfairly

By on November 4, 2009, 4:20 PM
Intel is back in the hot seat after being nailed with a record $1.45 billion antitrust fine in the EU earlier this year. The chipmaker has been sued by New York Attorney General Andrew M. Cuomo in an antitrust case with similar grounds.

In the latest suit, Intel faces allegations of abusing its dominance in the chip market to smother its main rival, AMD. Cuomo claims that Intel pressured PC manufacturers into limiting their use of AMD processors -- which is exactly why Intel was fined in Europe. "Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market," Cuomo said. Assuming the accusations are true, Intel not only unfairly restricted potential competitors, but also deprived consumers of better products and lower prices.

Intel denies any wrongdoing, and has appealed the European Commission's ruling. The recent filing is the first formal antitrust action against Intel by any US government agency in over a decade. The FTC began investigating the company in 2008, but has not initiated formal proceedings.




User Comments: 33

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red1776 red1776, Omnipotent Ruler of the Universe, said:

while this is 'alleged' at this point...I have a question as legal eaze is not my department. why isn't AMD suing Intel directly?

buttus said:

AMD can't sue Intel. It's up to the government to (a) decide if they have a monopoly and thus make an anti-trust case (b) if the SEC decide they were using illegal business practices.

I actually agree with them moving forward with a case. Intel for years had promised system integrators and channel partners rebates and spiffs when you purchased their CPU's. The rebates and spiffs were not for the end user but were instead were a kickback for those that sold Intel chips.

alberthuang said:

This antitrust suit may serve the consumer well over time.

Some people have said that Intel uses many tricky techniques to get their product to be first.

This definitely will change the market quite a bit. Maybe enough to get Intel to release

USB 3.0.

Staff
Rick Rick, TechSpot Staff, said:

That 1.5 billion fine from the EU is the "cost of doing business" to Intel.

Sure, it's a lot of money -- even to them I'm sure -- But with such a large market share and brand recognition, they'll just raise their prices to compensate.. passing the cost to manufacturers and ultimate to consumers. The damage is done.

Intel isn't what I'd consider a monopoly but they are certainly deserving of anti-competitive practices (which is the issue here). But then again, what company doesn't? On some level, it's the goal of every company to be a monopoly. Right? That can easily involve being anti-competitive in many ways.

Guest said:

Intel probably doesn't care if it has to spend relatively insignificant millions on attorneys and political bribes to deal with antitrust authorities. In fact, since Intel certainly made hundreds of billions from illegally maintaining its monopoly, you can bet that Intel probably laughed at the EU's 1.5 billion dollar fine.

Most of us would probably rob banks if the maximum punishment is a peanuts compared to the payoff. In the last 4-years, Intel made 150 BILLION DOLLARS. The record EU fine of 1.5 billion dollars is certainly equivalent to YOU being fined $10 for robbing $1000 from a bank. Long live Intel! Antitrust authorities are ants nibbling at an elephant's toe.

BMfan BMfan said:

It doesn't surprise me at all,i will never buy intel unless they are the only cpu maker around and i can't find a replacement AMD world wide.

Timonius Timonius said:

Anti-trust or not I select my hardware according to performance and quality. Intel has done it for me over the years. I've become comfortable with them as I know them better, however I'd be willing to give AMD a shot if I was convinced they make better products and provide better support.

MBK MBK said:

You know, I aint really a fan of capitalism, but it's how the world works. But if we're gonna do it, can we please do it right, Intel has been bribing and bullying it's competition out of the way and it is complete bull! They do make the fastest CPUs tho....hmm, principles or power?

buttus said:

AMD can't sue Intel. It's up to the government to (a) decide if they have a monopoly and thus make an anti-trust case (b) if the SEC decide they were using illegal business practices.

I hope something like this happens to even out the market again and give Intel a kick up the rear (and AMD something to work with).

Deso said:

I wanna see Nvidia getting hit with anti-trust for faking NAND chip yields to sabotage ATI's new 5xxx series

Kibaruk Kibaruk, TechSpot Paladin, said:

"...with another..." sounds funny, although it is definitely not.

Will they ever get the point in all this antitrust suits?

Xclusiveitalian Xclusiveitalian said:

If it is true than I hope they get huge fines because they would have been screwing us all over, however, it just seems not right to me. Where is the proof? Intel's dominance can't be used, thats just good marketing. COming from this new yorker, Cuomo should be doing other things that actually help ny.

red1776 red1776, Omnipotent Ruler of the Universe, said:

No Moore please

You know, I aint really a fan of capitalism, but it's how the world works. But if we're gonna do it, can we please do it right, Intel has been bribing and bullying it's competition out of the way and it is complete bull! They do make the fastest CPUs tho....hmm, principles or power?

really?...not a fan huh? then don't ever complain about a crap product you get again, because capitalism is competition. it is what breeds excellence and keeps prices down.

If Intel has indeed done this ,they should be appropriately fined., but good god man, you sound like you have a belly full of the Michael Moore Kool-aid.

....at least you spelled 'aint' correctly.

rgdot said:

I sure hope consumers do win in the end, otherwise one multi-billion dollar company suing another multi-billion company, indirectly or otherwise, doesn't fill me with any excitement or emotion.

Unfairness, monopoly, etc. may be good to fight against but if the only end result is one company making 2 billion instead of 1 billion, there is no point to the average person.

ken777 said:

Maybe all these anti-trust suits against Intel will help Nvidia make some headway with their licensing suit for making Intel chipsets. More competition and is always a win for consumers.

Puiu Puiu said:

First Europe, now the U.S. and next the world. At least they have the money to pay these record breaking fines.

With Intel being so much larger than AMD i find it hard to believe that they wouldn't use their power to stop AMD's growth (or speed up their downfall) by resorting to using such "evil" measures.

As ken777 said, i hope NVIDIA joins them because more competition is always better for us, the consumers, but not with another Atom like CPU - some real competition. (just like Intel is joining AMD and NVIDIA by making Larrabee)

limpangel limpangel said:

red1776 said:

while this is 'alleged' at this point...I have a question as legal eaze is not my department. why isn't AMD suing Intel directly?

Besides what buttus said, AMD and Intell have a lot of agreements between them. For example Intel licensed x86 chip technology to AMD and AMD licensed x64 to Intel. And Intel is very sensitive about the x86 license (see [link]

I always wodered why Dell had such a small AMD offering. I know Core 2 Duo was better than Athlon X2, but AMD chips were cheaper and not that underpowered. Heck, I'm running one right now and I played most of the 2008 pc games on very high settings (except Crysis of course :P ).

ET3D, TechSpot Paladin, said:

MBK said: hmm, principles or power?

Always a good question. You can ease your conscience by recommending AMD where it's a good choice, and buying it when applicable. It's definitely the best choice at the low end, and it's a decent choice at the mid range. Over $200 definitely belongs to Intel. At least don't give Intel the pleasure of getting sales at the low end just because they're the default vendor.

psycholexx said:

I can't understand why are they struggling so much to affect AMD sales by using these methods. Sometimes they blackmail computer makers, using the prices as a weapon... if a PC maker wants to expand AMD line, they just threaten that company with the rise of Intel prices for them. Instead they should focus on getting the best price/performance ratio, and gain market share based on that.

MBK MBK said:

red1776 said:

really?...not a fan huh? then don't ever complain about a crap product you get again, because capitalism is competition. it is what breeds excellence and keeps prices down.

Okay, let me rephrase that,

drive to better ourselves = good,

drive based on greed = depressing.

If people made things because they simply wanted to better standards of living, not just line their own pockets, it would be a lot better and things would probably advnace even faster as we wouldn't have companies waiting for their products to make maximum profits etc.

It must be possible, we didn't just appear on the earth with our current social situation, society defined it, so society (we all) can define a new one.

red1776 said:

....at least you spelled 'aint' correctly.

Yes, I did spell aint correctly. Well observe!, What's that got to do with anything though? (is it a Michael Moore thing? only seen one film once).

slh28 slh28, TechSpot Paladin, said:

I think there should be some incentive in place to encourage other companies such as Nvidia or VIA to get into the CPU market... I mean what other industry has one company with an 80% market share? At the moment Intel can charge whatever they want for their high end processors, e.g. $1k for their "Extreme" processors

waterytowers said:

Given the size of Intel and their revenue, maybe rather than a fine, they should be required to give away their current cpu design for all to copy and sell, free of royalties. This should make them think twice about anti-competitive practices. The playing field would be leveled to a degree, it would still take a while for other companies such as AMD to ramp up with sales of their competitors products, or integrate the design into their own chips.

fref said:

Anyone knows if they were found guilty when they were accused in Europe? If so, things will probably go the same way over here. I guess they use the same business tactics everywhere.

swilllx2p said:

Yeah this is why I always try to buy AMD products when possible over Intel. I realize Intel does have the better product out when it comes to CPU's right now but...oh well its not that big of a deal to me i'd rather support AMD. Like others said of Intel there probably pretty much not worried at all about it and they will certaintly continue with there tactics imo.

Staff
Jos Jos said:

Anyone knows if they were found guilty when they were accused in Europe? If so, things will probably go the same way over here. I guess they use the same business tactics everywhere.

They were hit with a $1.4 billion fine in Europe, which they are currently appealing. More here: [link] and here [link]

skipper50 said:

Is there nothing the governments in this country won't do to bring down the economy?

Wagan8r Wagan8r said:

I'm sick of the EU coming up with lawsuits for "unfairness". While I'm not defending Intel, I think the EU is more than a little lawsuit happy. They can't compete in a free market, so what do they do? File a lawsuit...

I'd like to see Nvidia get the rights to develop chipsets for the X58 platform. A lawsuit for that I would like.

Staff
Rick Rick, TechSpot Staff, said:

Is there nothing the governments in this country won't do to bring down the economy?

Right on, man! Because obviously the government is trying to completely undermine the country in which it governs.. because.. ahh.. they all live in other countries?

Heh.

Nirkon said:

Rick said:

That 1.5 billion fine from the EU is the "cost of doing business" to Intel.

Sure, it's a lot of money -- even to them I'm sure -- But with such a large market share and brand recognition, they'll just raise their prices to compensate.. passing the cost to manufacturers and ultimate to consumers. The damage is done.

Intel isn't what I'd consider a monopoly but they are certainly deserving of anti-competitive practices (which is the issue here). But then again, what company doesn't? On some level, it's the goal of every company to be a monopoly. Right? That can easily involve being anti-competitive in many ways.

So what do you expect AMD to do?

We pay the price because of Intel in the end, whether they are caught or not, prices go up

and the consumer loses money.

But if they are caught then AMD can get their products out on time and in the right price.

pioneerx01 pioneerx01 said:

red1776 said:

while this is 'alleged' at this point...I have a question as legal eaze is not my department. why isn't AMD suing Intel directly?

My question exactly. They are the one that lost the business. But are they getting any money from EU? Noooooo, why would they.

With that mentality I can sue Intel for the same reason.

pmshah said:

Rick said:

That 1.5 billion fine from the EU is the "cost of doing business" to Intel.

Sure, it's a lot of money -- even to them I'm sure -- But with such a large market share and brand recognition, they'll just raise their prices to compensate.. passing the cost to manufacturers and ultimate to consumers. The damage is done.

Intel isn't what I'd consider a monopoly but they are certainly deserving of anti-competitive practices (which is the issue here). But then again, what company doesn't? On some level, it's the goal of every company to be a monopoly. Right? That can easily involve being anti-competitive in many ways.

I don't know how it works in Europe or in US but here in India if any individual or a company is penalised of fined, this amount is not a legitimate deductible business expense. So if a company has to pay US$ 1.5 billion in fine they would still have to pay corporate tax of US$ 500 million being 33% currently prevailing tax rate. So the cost of doing business would increase to 2.0 billion dollars, directly out of the shareholders' pockets.

This might get the share holders and the company board thinking !!!!

Guest said:

Oh great stuff!

I'm sure AMD pays all these people to go after Intel. I wonder if that would come under investigation?

How does the saying go? All is fair in love and war...

Well, I would pay someone off to investigate my opponent. I'm sure AMD would do the same. And since AMD has been suffering to bring out better CPU's than Intel - I'm sure they would do anything to try and cause damage to Intel.

Why not fine Intel again and again until the prices go up so much that no one would want to buy them. What remains? AMD with their "cheap" prices. It's what they've done from the beginning.

red1776 red1776, Omnipotent Ruler of the Universe, said:

Okay, let me rephrase that,

drive to better ourselves = good,

drive based on greed = depressing.

If people made things because they simply wanted to better standards of living, not just line their own pockets, it would be a lot better and things would probably advnace even faster as we wouldn't have companies waiting for their products to make maximum profits etc.

oohhhh....I see, so can you tell me which video card is made with loving and caring,....and which ones are made because someone wanted to make a buck? because I am sure that the one made from the standpoint of bettering humanity will have a better frame rate. ...uhg!

and no, things would not advance faster, the whole system is based on producing something that pleases your fellow man, and that they are willing to spend the results of their labor on. those evil "maximum profits" you disdain so readily are what keep the development of more and even better things that please you, and that we find worthy of doling out the dollars that we get for producing something that pleases our fellow man.

peas said:

really?...not a fan huh? then don't ever complain about a crap product you get again, because capitalism is competition. it is what breeds excellence and keeps prices down.

If Intel has indeed done this ,they should be appropriately fined., but good god man, you sound like you have a belly full of the Michael Moore Kool-aid.

....at least you spelled 'aint' correctly.

The end game of capitalism is monopoly. Competition and improvement is a temporary state while businesses kill each other off. Only the govt can intervene to prevent monopolies and keep capitalism in its delicate competitive state.

Nice try at pawning the propaganda machine though.

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