N.Y. AG Files Antitrust Lawsuit Against Intel

CWmike writes "New York Attorney General Andrew Cuomo has filed a federal antitrust lawsuit against microprocessor maker Intel, alleging that the company engaged in a 'systematic campaign' of illegal conduct to protect a monopoly. Cuomo's lawsuit alleges that Intel extracted exclusive agreements from large computer makers and threatened to punish those perceived to be working too closely with Intel competitors. Intel gave computer makers payments totaling billions of dollars in exchange for the exclusive agreements, and the company threatened to cut off payments to computer makers or fund their competitors when they worked with other microprocessor makers, the lawsuit alleged. Cuomo's lawsuit comes less than two weeks after news reports that the FTC is considering filing a formal complaint against Intel. 'Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,' Cuomo said in a statement. 'Intel's actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices. These illegal tactics must stop and competition must be restored to this vital marketplace.'"

Comments

It's the new fad

[Bobnova]

Lets see if they do a better job on intel then they did on microsoft.

Yawn.

[DoofusOfDeath]

These illegal tactics must stop and competition must be restored to this vital marketplace.'

With that language, I wonder if he's just going for a consent decree regarding future conduct, and maybe a slap on the wrist. I wonder if this will in any way lead to AMD being made whole.

Re:Yawn.

[Pulzar]

Yes, for awhile the Opteron series was kicking Intel ass all over the map. But, AMD never really did that much with it after awhile, and Intel finally removed head from ass to come up with Core.

I guess the point here is that even though Opteron was kicking ass, AMD couldn't get past 25% or so marketshare, thanks to what Intel was doing to preserve its monopoly. It's hard to compete when your competitor can give Dell a billion dollars to stop them from buying any AMD.. (or threaten "jihad"!)

If AMD was fairly allowed to sell the products they made a few years back, they might have had the resources to keep their fabs and fund research into next gen CPUs.

Find/Replace

[Caviller]

Ah if only I could just use find/replace and find all 'Intel' in the article and change them to 'ISP X' then it would be a good day... Seriously, they should be going after the much more monoploistic ISPs in this country then Intel.

I'll scratch your back....

[surmak]

I wonder if this has anything to do with AMD (err Global Foundaries) dropping a few billion on the construction of a plant a few miles from Albany?

Re:I'll scratch your back....

[jellomizer]

Shhh Quite. The government only has our best interest in mind... Nothing as petty a bringing billions of dollars to an ailing local economy that is right next to the state capital.

Re:I'll scratch your back....

[Gudeldar]

Does that change the facts of the case?

Re:I'll scratch your back....

[brxndxn]

I'd say that viewpoint, which seems to be the mainstream on Slashdot, is like taking a single snapshot of a baseball game and acting like you can lay out the stats.

This antitrust lawsuit is filed after a precidence of antitrust lawsuits from other countries against Intel. Right now, if we take a snapshot of how Intel is competing, Intel may be playing fair. However, in the past - especially during the relatively long time (in the IT world at least) that AMD had the clear technology lead - there are quite a few reasons why there should be an antitrust lawsuit.

First of all, Intel only has the technology lead right now because Intel has more funds to dump into research and development. However, in the past, AMD leveraged themselves to put enormous amounts of funding into the Athlon and they came out with a clear technology lead. The market share barely followed. AMD had trouble selling their superior processors. The largest computer maker, Dell, was an Intel-only company. It's easy to be ignorant and blame bad execution on AMD's part - and maybe there was. But, there is some damning evidence that Intel was not playing fair. For example, AMD tried to give away 1 million processors to HP - and these were faster processors than Intel's at the time - but HP declined. Intel's pricing model was structured in a way to make it so that using any competitor in any small percentage would be more expensive than being 100% Intel only. They did this by using 'marketing rebates' that would directly correlate with the percentage of Intel processors sold.

Face it.. the P4 sucked. It did nothing but suck for years. It was an awful processor. Yet, somehow, Intel kept its exclusive agreements long enough to keep AMD from gaining significant market share - which would have in turn allowed AMD to keep spending on R and D which would have allowed AMD to remain competitive. It takes YEARS to develop the next best processor. Intel is only sitting where it is because it successfully choked AMD years ago.

For a few quarters, AMD was kicking Intel's ass - but it should have been kicking way more ass than it was. Also, AMD's financial situation is a result of leveraging themselves in order to compete with Intel and then not receiving the market benefits that normally come in a competitive industry with a technology lead.

Further, it is hard to dismiss threats as evidenced in emails from Intel against business with competitors. Or, you can shove your head in the sand and call this entire complicated situation as all sorts of 'red herrings.'

Re:I'll scratch your back....

[Chris Burke]

I'll agree with you on the shady practices of Intel when the Athlon line was launched - but I don't think a one hit wonder like that should magically position AMD as the top chip maker.

Nobody said they should have been the top chip maker -- that would have been impossible simply based on AMD's manufacturing capacity relative to Intel's. They should have gotten a lot more marketshare than they did, though, and that difference would have been huge for AMD. Companies like Dell and HP wanted to sell (more) AMD processors based on their merits, but the financial punishment that would come from Intel made it not worth it. That's a big deal.

Brand recognition is one reason. Reluctance of professionals trusting AMD processors in server grade machines could be another. The P4 may have sucked but keep in mind that previously AMDs chips sucked as well, and for a long time the only thing AMD was good for was reverse engineering Intel designs

Yes but those days were also long gone. AMD earned recognition as a chip designer in their own right with K6 as a budget processor, earned recognition as a chip maker capable of going toe-to-toe with Intel with the K7, and then knocked it out of the park with K8. The true customers of Intel and AMD, the OEMs, were well aware of AMD's "brand" and had no qualms about using them in server parts... Except for the interference by Intel. Did you see the email from Dell to Intel where they're basically telling intel that they're getting killed in the server market and Intel better do something? And intel's response is that the $billion they'd given Dell should compensate for their competitive disadvantage? Customers wanted to use AMD, but Intel made sure that AMDs marketshare was artificially limited.

Re:SpitzerSwallows?

[TheRealMindChild]

If you can't see a monopoly abuse on Intel's part at this point, I'd say you are the one with the agenda.

Besides, isn't doing good things so that you can get reelected SUPPOSED to be the way things should work?

Re:Maybe Intel needs a new CEO and Board.

[hemp]

I think you misunderstand the purpose of a Board of Directors. Their job is not to oversee the company, that is management's job. Their job is to look out for the interests of the stockholder.

NO Govt Seizure of Private Business

[Anonymous Coward]

Really, the simplest and most effective solution is to line up a few greedy CEOs and shoot them dead. Then the ones that weren't executed will know you mean business, that they need to play fair. So, if CEOs are as smart as they are supposed to be, to hold those corporate positions, only a very few need to be executed, for the message to be thoroughly understood and acted-upon.

Re:NO Govt Seizure of Private Business

[ae1294]

Really, the simplest and most effective solution is to line up a few greedy CEOs and shoot them dead. Then the ones that weren't executed will know you mean business, that they need to play fair. So, if CEOs are as smart as they are supposed to be, to hold those corporate positions, only a very few need to be executed, for the message to be thoroughly understood and acted-upon.

That wouldn't work, although we can give it a try anyway.

Sociopaths, by their very nature, do not see others as human beings equal in any way to themselves. They are unconcerned about any adverse consequences received by others due to their own actions or the actions of others.

Oversight with no understanding?

[Futurepower(R)]

How can a board of directors "look out for the interests of the stockholder" if the directors cannot understand the business of the company?

Re:Maybe Intel needs a new CEO and Board.

[ClosedSource]

"Their job is to look out for the interests of the stockholder."

But the job they really do is to look out for the interests of board members in general (e.g. if you give me big bucks for being CEO then I'll give you big bucks for being CEO through my buddy who sits on your board of directors).

Re:Delaware?

[XanC]

Because Intel (like most other large corps, I think) is incorporated in Delaware.

Re:Breaking the law is okay with you?

[cyber-vandal]

That's because corporate officers treat the law as a business expense and if it's cheaper to ignore it and pay any penalties they may incur then that's what they do. Microsoft are a classic example of that (sorry shills but it's true). That means there's more money for the stockholders (which includes the aforementioned corporate officers).

Re:Govt Seizure of Private Business

[Red Flayer]

We're talking about ISPs with government-granted monopolies supported by the restriction against the creation of competition.

And the alternatives to government-authorized and strictly-regulated monopolies in a market with natural monopoly tendencies are...

1. No service provider
2. Unregulated monopolies.

Maybe you weren't around when telephone and/or cable infrastructure was being built out. The choice was: license a monopoly, or get no service.

Even now, these markets tend to natural monopolies due to high overhead and infrastructure costs. So if we deregulate, we'll still end up with a monopoly... but it'll be less regulated one. Yay.

Re:Maybe Intel needs a new CEO and Board.

[Chris Burke]

(e.g. if you give me big bucks for being CEO then I'll give you big bucks for being CEO through my buddy who sits on your board of directors)

If it's even that indirect as to have to be "a buddy" rather than the CEO in question themselves.

My company's last CEO was, in addition to being Chairman of the Board of the company he headed, also on the Boards of two other companies.

It's a big incestuous network. When would the board ever not vote to increase executive compensation, or to create actual incentives not to run companies into the ground? Golden parachutes and ever-increasing bonuses (always to "maintain competitive with industry standards" that they created) are a direct result of this inbreeding.