Federal Trade Commission launches Intel antitrust probe

In the wake of its $25 million antitrust fine from the South Korean Fair Trade Commission, Intel has now come under the eye of U.S. antitrust authorities. The New York Times quotes officials and lawyers as saying the U.S. Federal Trade Commission has launched an antitrust investigation into the semiconductor giant’s activities.

The paper says new FTC chairman William E. Kovacic kicked off the probe with the backing of other commissioners, and that the FTC has already subpoenaed AMD as well as “several of the world’s largest [PC] makers.” The commission will investigate accusations that “Intel’s pricing policies have been designed to maintain a near-monopoly on the microprocessor market.”

Intel remains in trouble in the European Union over the same issues, too. The European Commission issued a statement of objections last year accusing the company of abusing its dominant position to lock AMD out of the x86 CPU market, and the NYT says EU regulators may now “expand their statement of objections.”

Comments closed
    • Mystic-G
    • 12 years ago

    Wait wait wait wait….. South Korea has computers!?!?

      • Corrado
      • 12 years ago

      They don’t play starcraft and wow on their abacuses.

      • Price0331
      • 12 years ago

      Ignorant post is ignorant.

      South korea counts for a large percent of worldly internet users.

      And yes, in mmorpgs they are some of the most fanatic.

        • derFunkenstein
        • 12 years ago

        The Price is right – I don’t see how you can have jokes about Korean starcraft players on one hand and no Koreans online in another.

      • pogsnet
      • 12 years ago
    • LicketySplit
    • 12 years ago

    #29 thats the bad thing. Intel needs to have their collective ass handed to them more than once just to make it halfway level on the playing field. With the money they have to spend a message needs to be sent saying this shouldnt happen again:)

    • pogsnet
    • 12 years ago
    • alex666
    • 12 years ago

    This is good. Get it out of the realm of an AMD suit and into an FTC investigation. Anything to promote competition. I mean, really, I can’t believe some of these comments about the inferiority of AMD chips. True for the present. But just two plus years ago (pre-C2D), the conventional wisdom was Intel products sucked, and AMD was displaying innovation and far-sightedness, and there was a lot of truth to that. Who knows, if Intel was genuinely stealing market share, maybe that precluded AMD from financial stability and hindered R&D and the ability to maintain their competitive edge. Just conjecture on my part. But who knows. Let’s see how it all shakes out.

    • deinabog
    • 12 years ago

    And all this time I thought it was AMD’s poor-performing CPUs that threatened to lock them out of the business.

      • Stranger
      • 12 years ago

      I think you’re about 5 years ahead of the American justice system.

    • thermistor
    • 12 years ago

    Likely this will be for activities that were confined to 1998-2004 time frame. With so many OEMs (Toshiba, Dell, etc.) going non-exclusive source, plus increasing market share of AMD since 2003, I can’t see how recent years, 2005-present, could really be viewed as an anti-competitive environment. But like many anti-trust issues, this one will be decided years after the fact.

    The more important thing for Intel is will this result in a Standard Oil type breakup or just a slap-on-the-wrist Microsoft-style fine.

    • albundy
    • 12 years ago

    lock them out of the x86 cpu market? all this time i thought it was the lackluster performance of the amd chips.

    • flip-mode
    • 12 years ago

    It’s about time. Remember the days when mobo packaging for AMD chips never came labeled? This should have taken place way back then.

    • Ryu Connor
    • 12 years ago

    q[

    • bdwilcox
    • 12 years ago

    I hear that Intel also promised the OEMs cookies.

    • albundy
    • 12 years ago

    millions in fines are not even worth anything but gunk under the fingernail for Intel.

      • UberGerbil
      • 12 years ago

      But they provide ammunition for a civil suit by AMD.

        • leor
        • 12 years ago

        and it’s not like they don’t hurt, intel won’t go under but their stock price and profit margins will drop.

      • stmok
      • 12 years ago

      You’re looking at the trees, not the forest…Its not about the fine.

      UberGerbil gets it. Its potential ammunition for future cases.

    • DrDillyBar
    • 12 years ago

    l[

      • Master Kenobi
      • 12 years ago

      That’s subjective. Businesses can enter into agreements to sell a specific type of product and ignore competitors. There is nothing legally stopping Dell and Intel from having an agreement that they sell only Intel based systems and in return Intel guarantees them first pick at new stock and shipments, new products, and maybe even a bulk discount.

      That scenario is 100% legal. With the PC makers competing with each other, they would make all sorts of deals to get an edge up on their competition, including exclusive distribution sales with Intel and other companies.

      • TheEmrys
      • 12 years ago

      Not at all. It is more of “Buy these 3,000 processors at our discount price of $100 each” when the cost to manufactur them is $110 (not the real number). Or to offer a rebate that would bring the cost down to below the price of manufacturing. In essense, selling the chips at a loss.

      • DASQ
      • 12 years ago

      No, the point is the predatory pricing they practice, specifically undermining/attempting to bankrupt any chance of fair competition.

      If a big giant company with billions in cash simply sells below cost and survives on that buffer, unless the other company has an AMAZING product that cannot be beat or matched, it becomes a simple matter of who has more money to lose.

      It’s a law in place in order to prevent super corporations from killing off any attempt at competition, i.e. monopoly

      • Damage
      • 12 years ago

      AMD has alleged that Intel’s pricing scheme was much more nefarious than that.

      It supposedly relied on predicting the total size of the PC market and the likely market shares of the various PC OEMs and then setting targets for each of them. If the PC maker reached the targets Intel set for each quarter, Intel would give it a retroactive discount on all CPUs it bought–but only if the goal was reached. In doing things this way, Intel was able to dictate how much additional room the PC maker had to devote to sales of AMD processors. The cumulative effective was to constrain AMD’s market share.

      That is the allegation, at least, or one important part of it. Way more than simple volume discounts going on there.

        • pluscard
        • 12 years ago

        Damage, it’s nice to see at least a few people understand the concept. So many write “what’s wrong with rebates?”

        Investigations in Japan, Korea, The EU, the state of NY, and now the FTC should be sufficient to indicate “Houston, we have a problem!”

        Plus

          • stmok
          • 12 years ago

          Its more like the storm clouds have started to gather over the lavish green fields of Intel’s pasture…

            • NoOther
            • 12 years ago

            They still have to find something lawfully wrong in what they did. These practices are used by many companies. Even AMD has used anti-competitive practices before trying to get Alienware from using any Intel products. Its a 2-way street. By far AMD has done some more nefarious practices than Intel, especially with their marketing jargon.

        • DrDillyBar
        • 12 years ago

        But isn’t this to have occured in the P4 days?

          • Pettytheft
          • 12 years ago

          Which makes it all the more wrong. Intel was getting it’s ass kicked in the P4 days performance wise by AMD. Yet somehow they were still raking in huge profits.

            • green
            • 12 years ago

            that was in part due to sheer production volume & demand
            intel has always been able to outproduce amd due to their fabs
            remember when dell let amd on board, the channel suffered with dell given preference
            resulting in a statement from amd saying they’ll make efforts to refocus on the channel

            back on point though, during that time intel’s profit margin had fallen significantly
            due to the sheer amount of processors sold though it didn’t matter so much
            (ie. what we lose in margin, we’ll make up in volume)

          • dragmor
          • 12 years ago

          Much earlier, we talking P2 days into the P4 days. Back when even the Motherboard giants would only sell their AMD motherboards in white boxes for fear of Intel taking away their licenses or charging them more for the chipsets.

    • ludi
    • 12 years ago

    What? No fair! The FTC might interfere with Intel’s ability to do business!

      • stmok
      • 12 years ago

      No fair? What antitrust cases tell me is that: if you do business and you do it honestly, you aren’t likely to have a problem (due to your behaviour) in the long term. Your success is genuine. You have nothing to hide, and your competitors have nothing on you. You focus on making great products. (Compete on technical merit, quality, etc).

      On the other hand, if you are too focused on getting the “golden eggs” at any cost (honesty, integrity, etc), it will bite you back in the ass sometime in the future.

      Some people view that as “karma”. Personally, I see this in the terms of “choice and consequence”. You can control the choices you make. You can NOT control the consequences of your actions. You just have to accept them, good or bad.

      For some reason, there is a general acceptance of treating others like crap, stepping on them, making their life difficult, etc as being OK in the business world. Its commonly referred to as “doing business”.

      That’s a mistake…Business is about making money and valued relationships. (between you, the customers, partners, and even competitors).

      Somewhere along the way, this turned into just “make money by any means you deem fit”. Such views often results in you spending more money on lawyers, which would’ve been better used on R&D. (Intel’s IGP isn’t what you call decent performing by any measure, is it? Good CPUs, crappy graphics solutions.)

      While being a “good guy” doesn’t make as much money as the “bad guy” (takes longer and is harder) in the short term, it pays off in the long term. Even if someone tries to pin crap on you, you will have friends you can rely on.

      This isn’t about hurting dominant companies because they have the most market share. Its about what they did to get there, and how they’re maintaining that dominance. If its found to be unacceptable behaviour, they will be punished. That’s the gist of it.

        • UberGerbil
        • 12 years ago

        If you’ve read Ludi’s other posts on this (and related) topics, you’d realize he was sarcastically summarizing the arguments he criticizes.

          • ludi
          • 12 years ago

          I guess that /[

          • stmok
          • 12 years ago

          Thank you for that, UberGerbil. I haven’t visited TechReport.com in the last few months.

          Lesson learnt. => ** Mentally blacklists *[

        • SubSeven
        • 12 years ago

        Well stated stmok. There is something inherently appealing in your statements… perhaps that you, like myself, believe in the good guy winning in the end (that’s probably just the optimist in me). Unfortunately, this doesn’t always happen. There are companies out there that step on others and get away with it all the time… Microsoft is one of them. I just want to state that as I read through some of the comments here, it seems that the field is devided. To most, Intel is the “bad guy” while AMD is the poor innocent company trying to do business. To me, Intel is just the 500 lb gorilla… and for the most part it is a legitimate company trying to do what any company would try to do… increase shareholder wealth. AMD is far from an innocent entity; they’ve done plenty nasty stuff too. In short, I have my money riding on AMD for the moment and my hopes are set on it’s success and survival. If Intel did what it shouldn’t have (and I think it did) then they will pay for it.

    • DASQ
    • 12 years ago

    Nothing better than money you didn’t earn!

Pin It on Pinterest

Share This