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Intel Fires Back At FTC In Antitrust Suit

Posted by ScuttleMonkey on from the digging-in-for-the-long-haul dept.

adeelarshad82 writes "Intel has responded to the Federal Trade Commission's antitrust investigation, unsurprisingly challenging the FTC's allegations as well as criticizing the agency for what the company calls an attempt 'to turn Intel into a public utility.' The motion is a response to the FTC's December announcement of a lawsuit brought by the FTC, accusing Intel of anti-competitive practices. Intel also goes on to provide a paragraph-by-paragraph rebuttal of the FTC's complaint and proposed remedy, although most of the company's response seems designed to promote the impression that those that failed, failed on their own."

9 of 122 comments (clear)

  1. Re:Government is best at deciding about the econom by JoshuaZ · · Score: 5, Informative

    Actually, anti-trust issues are exactly the sort of thing that needs to be handled by the government because no one else is in a position to do so. There are many good reasons for anti-trust issues: 1) large controling companies in industries can hurt customers, stifle competition and stifle innovation. 2) They make industries and the economy as a whole more vulnerable to sudden fluctuations (look what happened in the banking industry. That was in part because the largest banks were too large. Unfortunately, we haven't really dealt with that part of the problem...). The FTC doesn't need to know how to run a business. They just need to know how to identify anti-competitive practices.

  2. I don't quite get it... by i_ate_god · · Score: 3, Interesting

    I could have sworn that at one time, the Athlon was king of the world, then the Core 2 Duo's came out and Intel was king of the world since because AMD hasn't made a superior CPU.

    Is Intel supposed to purposefully degrade the quality of their product? What is it that they did that has the FTC crying foul?

    --
    I'm god, but it's a bit of a drag really...
    1. Re:I don't quite get it... by Rockoon · · Score: 5, Informative

      ..because even when AMD was price AND performance king of the x86 CPU, Intel still sold more due to market manipulation.

      --
      "His name was James Damore."
    2. Re:I don't quite get it... by Chris+Burke · · Score: 5, Informative

      Actually it's Intel's business practices during the time (and before) Athlon was "king of the world" that are at issue. They fed companies "cooperative marketing" funds (read cash handouts and sweetheart pricing deals) via the "Intel Inside" program that were not based on how much Intel product they moved, but rather on them not selling AMD parts. There were companies that wanted to sell more AMD, but couldn't because with the amount of money Intel was giving them, it simply didn't make sense. They would have been crushed by competitors who were willing to play ball with Intel.

      Thus was Athlon's marketshare artificially limited, which can be seen as a cause of AMD later falling behind. There was a brief period in the K8 days where AMD was fab capacity limited, but this too is because AMD had not secured enough revenue from Athlon to build as aggressively as they would have otherwise.

      As usual, legal entities like the FTC move slowly, and the issues they actually act upon are thus well in the past. Not that Intel stopped engaging in these practices until (possibly) very recently, when other trade organizations around the globe started hammering them and AMD's lawsuit against them was settled in AMD's favor. It's just understandably harder to see the business practice issues when Intel's products are also superior.

      --

      The enemies of Democracy are
    3. Re:I don't quite get it... by archer,+the · · Score: 4, Interesting

      Also, there were rumors that if a motherboard manufacturer was thinking of making new AMD boards, Intel allegedly would hint that the manufacturer might face a shortage of Intel chipsets.

      http://www.tomshardware.com/reviews/early-athlon-motherboard-review,123-2.html?xtmc=athlon_boards_chipset_shortage_taipei&xtcr=2

  3. Re:The general problem Intel has by Deosyne · · Score: 3, Insightful

    Yeah, there was way too much common sense in that posting to have anything to do with our legal system.

  4. Re:The general problem Intel has by lorenlal · · Score: 5, Informative

    Intel has a good point. If the a major point of the FTC's inquiry is that they have an integrated presence in the market, then is Intel being penalized partly for merely being successful, and making good business decisions? Pah. They are in a competitive business. AMD is suffering as much for their choice in manufacturing partners as anythuing right now. Design aside.

    I believe that the major points in the FTC's inquiry involved Intel essentially holding their immediate customers over a barrel involving pricing of their chips. Specifically:
    http://www.ag.ny.gov/media_center/2009/nov/nov4a_09.html

    By leveraging their market position, Intel provided "rebates" to customers who went with Intel exclusively. When a computer maker wanted to offer AMD-based systems, Intel would threaten to raise their per-chip cost to a point where the maker couldn't compete. There are plenty of other notes. Please feel free to review and comment.

  5. Re:Government is best at deciding about the econom by Snarkalicious · · Score: 3, Insightful

    Preservation of competition is about maintaing the health of the consumer market. The FTC isn't saying that Intel doesn't know how to make money, but that their practices are threatening to the maintenance of a robust competitive market. Capitalism without a framework of rules and standards that is about as sustainable over the long-term as the communist shadows your sig line is barking at. Take it from a left wing progressive: The policies put forth by Obama are centrist. The center has just been far enough to port long enough that most folks don't recognize it anymore. Oh, and when we gave the Fed those billions, what they did was to prevent a total sieze-up of credit markets, without which large scale economic movement is essentially impossible. What they did there was to save capitalism from the ravages of an underregulated market.

  6. Re:The general problem Intel has by Chris+Burke · · Score: 4, Insightful

    I suspect that if this is the theory the FTC is presenting, Intel is correctly going to counter that this is neither sufficient grounds for additional restrictions, nor is it actually a hindrance in today's or even last year's market.

    That is not the theory the FTC is presenting, and the issues that the FTC is investigating don't involve today's or even last year's market.

    The theory involves intel's business practices over many years and their efforts to lock out or marginalize them by making agreements with OEMs that said they were required to do exactly that or be at a huge competitive disadvantage vs everyone else who was willing to play ball with Intel. Just as one example.

    There are some competitors to Intel (AMD) that don't even OWN fabrication facilities. They have access to competitive foundries that can produce their product.

    Yes AMD chose to spin off their fabs, because they literally had no other choice. Debt was piling up, and this made securing the incredible amount of funding necessary to build new fabs impossible.

    But barring their own spun-off fabs, no they do not have access to "competitive foundries" that can produce their product. Intel was already ahead of AMD's fabs, and AMD's fab is ahead of all the foundries (not counting that AMD uses SOI and all the foundries use bulk), who have neither the capacity nor the time to dedicate to tweaking their processes specifically for AMD's needs so they have a chance of remaining competitive with Intel. AMD is just as dependent on "their own" fabs as ever.

    That said, Intel having a fab and AMD selling theirs off (though it's still on AMD's books) is not the FTC's complaint as TFA explains. You rread a lot into the OP that wasn't really being said. They just said anti-trust made sense in chip sales because of the barriers to entry. The actual issue was and is anti-trust, not the barrier to entry itself.

    Similarly, competitors such as Freescale etc.

    Sorry but LOL.

    The FTC is not chartered to address a competitor's poor choices, if indeed AMD made a poor choice in being fabless.

    That's right, they are chartered to address anti-competitive business practices on the part of the monopolist, which is what they are doing.

    Intel has a good point.

    Intel is not making the point you think they're making.

    Also, they will of course say they have a good point, but it's the exact same points they made to the Japanese and EU trade commissions and during AMD's lawsuit against them, and they didn't fly then. Our FTC seems to move even slower than the others, but part of the reason they're waiting so long and talking about issues from the past is because they have spent a long time investigating and gathering evidence to make their case.

    Assuming they have some of the same evidence as the EU that I've seen, Intel doesn't have much of a chance. Though even without that, anyone paying attention through the 90s and early 00s knows what Intel was up to.

    --

    The enemies of Democracy are