FTC Opens Formal Antitrust Investigation of Intel

andy1307 writes to tell us that according to the New York Times, The Federal Trade Commission has opened a formal antitrust investigation of Intel. Reversing the decision of former FTC chairperson Deborah P. Majoras, the new chair William E. Kovacic is pushing the investigation to look into Intel's pricing policies. "Since it will almost certainly be many months before the commission decides whether to make a case against Intel, as European and Asian regulators have already done, the investigation could mark an important early test for the next administration on antitrust and competition policy."

Comments

Never understood....

[thtrgremlin]

Not that I have ever had a problem with Intel (though I have always bought AMD), but I never understood how why Microsoft gets ALL the blunt of the anti-trust stuff. Intel made a killing with their "Intel inside" campaign, but was it THAT great? I think more architectures for home PCs would be a major benefit to open source software, and a big hit to the stranglehold M$ has had over the sheeple for a long time. I have wanted to get a sparq for a long time, but it has felt a bit to risky to just make a statement. I really hope something comes of this investigation, if Intel was really playing unfair.

Not just Anti-trust

[houstonbofh]

I hope people remember that there are some good reasons to avoid AMD besides pressure from Intel. More than a few people got burned by the poor support for OEM cpus that were DOA. I was one, and avoid AMD to this day because if it. Yes, they are better now, but I have a long memory.

Re:Not just Anti-trust

[Anonymous Coward]

I can't help but notice that your comment makes no sense at all.

This like most of the techno anti-trust cases is plain old Bullshit and reeks of nothing more than more bashing on big guys, which our government appears to like to do more and more.

And they wonder why more and more businesses are starting to locate outside of the USA. You do realize, as the article says, that the US was one of the last countries/organizations to investigate Intel, right? The EU has already opened an investigation, and just recently, South Korean fined Intel $25 million. So yes, more businesses should locate outside the US, so that they will be under the jurisdiction of sane government entities who aren't pussies and will actually investigate companies for antitrust violations.

Re:Intel is a monopoly?

[3p1ph4ny]

I'd say so:

Intel...controls 80 to 90 percent of the microprocessor market.

Also, for those of you (like me) who were wondering what exactly they did:

A.M.D. has asserted that Intel offers rebates and discounts that, in effect, result in its chips being sold at prices below the cost of production, a practice that some courts in cases involving other companies have said can be a violation of antitrust law.

Intel denies that its discounts and rebates drive its prices below cost, or at predatory levels. Intel has said that it offered legitimate discounts based on the volume of chips that have been purchased by companies, and that consumers benefit when personal computer manufacturers â" using the discounts â" are able to lower the cost of making their products.

Wait a Minute....

[mpapet]

Why is this happening now instead of years ago? The harm Intel has created is egregious and has been obvious for a long time.

Did someone at the White House get up on the wrong side of bed one morning? Maybe the White House didn't like what the Executives were doing with their political action funds?

Why now?

Intel is Guilty

[byteherder]

The dirty little secret of the industry has been that Intel has been guilty of unfair business practices for a long time. Basically, they say to their customers, if you cut out AMD we will give you cut rate prices. If you don't we will only give you a limited supply of chips and your competitors will kill you on price and volume. They are like the mafia in business suits.

The European commission made a estimate of the damage Intel did to the market and it came to $60 billion. I would like to see that much given to AMD but I am not holding my breath.

Re:Intel is a monopoly?

[Anonymous Coward]

It's not really discounts, but "marketing support". Which is why nearly every ad for a PC has the Intel chimes/logo at the end.

This plan was really devious because not only does it encourage OEMs to use Intel, it also made "Intel Inside" into consumer religion.

Re:Intel is a monopoly?

[Chris Burke]

Such large companies may be able to sway the market, but do not necessarily become abusive. Most likely they do, of course - power corrupts.... Indeed, that's a very good point, and it's equally worth pointing out that as long as the monopoly is not abusive, then it isn't breaking any laws.

Monopolies aren't "punished for success" as I heard a few thousand too many times during the MS anti-trust trial. Monopolies are punished for parlaying that success and resulting market power into back room deals designed to prevent any competition from getting a leg up.

Re:The apple deal may also be part of this as well

[TheRaven64]

It boils down to two things. First, Intel had the Pentium M, and were about to launch the Core (slightly improved Pentium M) and Core 2 (new, lower power, microarchitecture) lines. Apple were selling more laptops than desktop and this trend has continued. The Mac Pro is a tiny, tiny fraction of their turnover and profit - it's a showpiece, while the machine that actually sell are the laptops. AMD had nothing comparable in the mobile CPU and (importantly - one of the reasons for the switch was that Apple wanted to stop designing their own chipsets) chipset arena.

The other problem is volume. Motorola and IBM had both had problems supplying Apple. When they switched to Intel, they became responsible for about 5% of Intel's demand. If they had gone to AMD, they would have been responsible for 50%. If Apple double their market share, Intel needs to grow by 5% to accommodate them. AMD would need to grow by 50%. Which do you think is more likely to happen?