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

Re:Intel is a monopoly?

[Anarke_Incarnate]

Monopolies, in markets like this, are not meant in such that there are 0 competitors. However, when a company becomes so large that it can sway the market on its whims, then it becomes abusive, and therefor detrimental to consumers and competition.

Intel has been using their size, money and influence to keep competitors out of use in their customer's systems. This is anti competitive, and when on a scale of this size, is considered monopolistic. Intel owns over 80% of the microprocessor market, plus they design specs for systems, such as their PCI spec.

If Intel is guilty of keeping other processors out of machines by being anti competitive, they are going to see some sanctions and fines.

Re:Intel is a monopoly?

[Dogtanian]

If Intel is guilty of keeping other processors out of machines by being anti competitive, they are going to see some sanctions and fines. If the senior management were likely to get thrown in prison, could we make jokes about "Intel Inside"?

Sorry... :(

Re:Intel is a monopoly?

[Anarke_Incarnate]

Yeah. They would be shown some new backdoors and have their interfaces expanded to accept all sorts of new peripherals.

Re:Intel is a monopoly?

[Anarke_Incarnate]

Except that's not how it worked or works.

Intel was a single source supplier for CPUs. IBM wanted a second source or they would not deal with Intel. Intel then sourced production of pre 486 CPUs to AMD. However, they did not restrict AMD from selling them as their own, which they did. Then, AMD was developing their own chips based on the instruction set and specification that intel developed. Intel sued for trademark infringement, knowing that AMD had the license to produce likewise chips. The courts in the US ruled that Intel could not trademark a number, which is why there was no 586, but rather the "Pentium" with the 5 prefix Pent. This is a trade-markable name.

Being more agile than Intel, and being willing to accept thinner margins than Intel, AMD and competitors were pricing very attractively to OEMs. Intel, however, looked disfavorably on this. They punished their customers with "shortages" of their chips and chipsets, knowing it would allow their customer's competitors, also their customers, to gain an upper hand. They also offered special pricing, not for volume, but for "loyalty." They would give their customers a break if they were 100% intel customers and not "Buy 10,000 units and get 200 free, which would likely have been legal.

The issue is not substandardness nor the inability to compete. Instead, it was that after the original Athlon, AMD was able to out maneuver the challenges that intel through in its way and was able to out innovate them in many areas. The FSB that intel still uses can cause memory bottlenecks as well as poor scaling to multiple sockets and cores, but that is a topic for another discussion. Intel was abusing their customers, their competitors, and consumers with their methods of market manipulation. But, to quell your intent to show that AMD et al were simply riding on Intel's coat tails, ask yourself "Who built the spec to extend x86 to 64bits with extended register counts?"