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Intel in Antitrust Trouble in Japan
vincecate writes "The Japan Fair Trade Commission has ruled that
Intel violated antitrust laws in Japan.
Giving customers discounts based on the volume of your products
they purchased is good business.
However, Intel was adjusting customer discounts
based on the volume of competing products they purchased,
which is not legal.
After the ruling,
AMD responded saying, "We encourage governments around the globe to ensure that their markets are not being harmed as well".
While
Intel responded
saying, "Intel continues to believe its business practices are both fair and lawful."
I know very little about law in this area. Is it the same in the U.S. and Europe? I would like to think it is but then considering today's climate I wouldn't be surprised if you it wasn't!
Oh regarding Intel's comment that it "... continues to believe its business practices are both fair and lawful.". It might just be legal in some countries but how is it fair to use your dominant position to prevent other companies from being able to compete with you? A statement like that is just a bare faced lie. If the situation was reversed you can bet Intel would kick up a fuss. I'm not saying I'm surprised it is just irritating.
Intel? Antitrust!? I don't believe it! I'd sooner believe that Linus Torvalds switched to a new OS!
Specialization is for insects. -Heinlein
While Intel responded saying, "Intel continues to believe its business practices are both fair and lawful."
That's how PR hacks are taught to respond. When, for example, your CEO is stealing money, your PRish role is to go out and with a straight face say: "The core Value of our company is Honesty. We will introduce a Business Codex to emphasize our commitment."
Does this mean that we get to start referring to Intel as a "convicted monopolist" in every /. article about the company, just like we do for Micro$oft??
That's awesome!
I think you missed the point slightly, it goes something like this:
Intel: "if you buy 1 chip it costs $500"
Intel: "But if you buy 10 it costs $450 per chip"
Intel: "If company X wants to buy 10 then it will cost them $480 per chip because we found out they bought an athlon chip last week"
THAT is not on!!
Can someone tell me honestly what's wrong here? Intel are the ones who have control over their product. They get to sell their products and define how much it sells for. Why are governments getting involved?
Obviously if a company is buying more of a competitor's products then they're buying less of yours, so your own are more expensive to them because they are buying in lower quantities. that is simple grade school economics."
The problem arises when somebody tries to use their position as the established leader to keep other companies from establishing a marketshare, thus using their dominance to maintain a monopoly. Not as much of a problem with Intel as it would be with a company like Microsoft (as AMD is a very strong competitor), but still not a good idea to let bad practices get started.
Again, basing your prices off how many of YOUR chips they buy is okay. What this alleges is taht they are also factoring in how many of the competitor's chips they buy, which is not. How many AMD chips a company buys is none of Intel's business, and shouldn't affect prices.
Simple example. Company A makes 100,000 computers, and uses Intel for 50,000 and AMD for 50,000. They should be charged the exact same rate as Company B, which makes only 50,000 computers but uses Intel for all of them. The accusation is that Intel would instead charge Company B a lower rate, because while they purchase the same volume they don't purchase any from AMD.
As somebody else said, the carrot is legal, the stick is not.
Actually, from the way TFA explained it, it sounded a little more like this:
:P
Company A and Company B buy 500 intel processors.
Intel goes back to those companies and says "Hey, we'll pay you money^H^H^H^H a 'rebate' - if you promise not to buy any AMD chips for a while."
Company A says "ok" and gets the cash, Company B tells them to go to hell, and doesn't get squat.
But who reads TFA around here?
But if Intel really believes this is "fair and lawful", why is it that Intel does not use written contracts for these deals?
"Intel continues to believe its business practices are both fair and lawful ,in spite of all evidence to the contrary."
If they keep on going like that, pretty soon we'll have Intel turn into a religion.
Just
Are you really surprised? Intel and all large corporations exist to make their organisation more valuable. They all push the law just as far as they think they can get away with... but this time, they judged wrong. I'd love to know about all of the dodgy shit that even fairly reputable organisations get up to, because I suspect there's an awful lot more of this stuff going on than your average person knows about.
;)
I always think of it like this: they're not immoral, they're amoral. They just don't care about right or wrong, they can't afford to, because that's how the system works. I'm glad that they got caught, and I think we need much more government constraints put in place and have them actively enforced to prevent things like this from happening.
Of course, for that to happen, I'd need to buy myself a politician or two... and I'm only a poor student... care to give me a donation anyone?
It's a rich and vibrant culture those Japanese have, I tell you.
StupidChildren...the reason jesus is crying
I mean the Intel CEO called Dell's CEO and said: "If you offer a single system with AMD processors we'll raise the prices on our stuff". Of course both will deny.
I strongly suspect something like this: in big business relationships, you can never be paranoid enough. The reality is much worse than anything that most people could start to imagine.
For example, AMD has been the only source for mobile 64 bit processors for quite some time. But Intel can prevent Dell from entering the market until they are ready, and maybe also pressuring Microsoft in the same direction, so that both Dell 64 bit portables and 64 bit Windows will be available only when Intel has all 3 catergories (mobile, desktop and servers) covered.
I'm not surprised at all that Intel has such practices with its customers.
Two years ago, in the company I worked for, we needed to buy 600 cheap servers from Dell for an embedded application that we had to install at our clients. The price was really very important. If we couldn't get them at the right price, our project was not going to make it.
Dell did everything to lower the price. I remember they went down as much as 50% but it was still not enough.
We were about to cut the project when Dell called us and told us that the only way to reduce the price of the 600 servers further was if we signed some sort of paper saying that we used AMD processors in our previous project and this was a replacement project. This way they could get a big rebate from Intel under a certain program provided by Intel.
I just couldn't believe that Intel was ready to go that far...
A hungry bear does not dance!