That's not true. Intel can still sell at the discount price but the buyers can still purchase AMD products too. There is nothing anti-competitive about that.

They could, but that has two considerations.

A certain % of the vendors total volume is going to shift from Intel to AMD (as you so duly note). Since Intel is in the business of making a profit and these previous deals apparently worked on the vendor getting a discounted price based on meeting 100% of their need. Well, you'd have to assume that if the vendor is no longer buying 100% of their need from Intel, that the level of that discount might have to adjust some for the level of sales lost to AMD. Especially given that Intel was getting a certain amount of return for these rebate sales while they sat on the money. Less processor bought means less money sitting accuring interest (and thus less interest earned) before being rebated back to the vendor.

The more amusing effect is that AMD has to sell lower than Intel. So a rebate funded lower Intel price means that AMD has to sell for less than that Intel processor.

The fact AMD is selling each processor for less money than Intel is part of the reason the company is drowning in red ink.

So, yeah. I can see how AMD has made things both more expensive for the consumer and screwed themselves at the same time.

Whats the difference between selling at a loss to kill the competition or offering rebates to block out their competitors?

The the former results in no profit and is unsustainable in the long term.

The latter is a discount that is sustainable (Intel does turn a profit) and brings cost benefits to both the vendor and the consumer.

The former is anti-competitive. The latter is just good business.

Keeping prices artificially high in order to keep a business that is mismanaged alive is not good for the consumer, which personally I thought was the entire purpose of anti-trust law. I guess I was mistaken.

Apparently in SK the purpose of anti-trust laws is to allow poorly run businesses to continue operations at the customers expense.

Really, it'd be funny if it weren't so sad. All this suit did was make Intel products more expensive. Thanks, AMD!

There problem is Intel is forcing vendors not to sell any AMD cpus.

The commission said that Intel provided rebates to Samsung Electronics Co. and other South Korean computer makers to not use central processing units, or CPUs, manufactured by AMD, Intel's main competitor.

If Intel is really playing fair, why can't Intel just tell vendors, we'll give you this much of a discount if you ordered this many units?

Even if Intel sells their cpu way below what AMD can sell their cpus for (in both case, without ever going below cost), the final decision should still be made by vendors and not forced upon them.

AMD can't compete with Intel on the high end consumer space (gaming) but is still quiet competitive in the lower end and the server space.

Being realistic, if you are a small/medium sized vendor, you may opt to go all Intel just so you can get the benefit of volume discounts but at some point, you'll want to diversify and minimize the risk and have a larger customer base. That is if Intel didn't threaten to jack up your prices, which if you think about how the rebates are structured, is what it effectively does.

Should have been 125 million. Intel's processors are adequate - I don't know why they resort to bully tactics.

I give up. I genuinely hope you find yourself a successful career in politics, or at least political punditry, as this style of argument can make a man tremendously wealthy.

Other than the fact I didn't say Intel couldn't offer discounts. I simply said the the level of the discount has to be adjusted for the loss of income.

I also said that the adjusted discount based on the loss of income would increase the price of Intel processors (true) and that it won't help AMD any (their ASP sucks).

http://www.newegg.com/Product/Product.aspx?Item=N82E16819115034

It's 2008 and $1K processors still exist. AMD has a few in the server field too and you can bet your tush that if AMD was on top in desktop performance their black model would also be $1K.

The reasons processors are cheaper now has little to do with competion and alot more to do with the economics of silicon.

HAHA more countries now has seen INTEL EVIL MARKETING STRATEGIES... Good! Japan and European Commission has said it before...

Bribing somebody not to buy other product is very EVIL........ go to hell Intel ... ARE YOU AFRAID OF AMD??? LOLS

Yes, that is the whole idea. By limiting what Intel can do, it allows a competitor to survive.

That comes at the cost of making vendors and thus consumers pay more.

Making the consumer pay more and discouraging competition to keep a company that is being mismanaged afloat is pretty stupid.

I have to assume that this news story is short on facts, because right now it's patently absurd.

Why is that illegal?

Intel earns about $40B annually. A $25M fine is paid off in about 5.5 hours of their worldwide income.

But that's not what Intel worries about. A ruling against them provides a basis for further civil lawsuits, by AMD and possibly by OEMs that didn't get the best deals, in Korean courts. It also acts as evidence in AMD's various other court fights with Intel, and for the antirust investigations that are ongoing in other countries.

Recall that after MS's loss to the DOJ, it was hit with a raft of civil suits using that outcome to seek damages.

Good for Korea! Now if they'd just go after MS there......

Jacobs is right. Intel uses rebates in a competitive fashion.

now you know how politicians fill their pockets.