Robert Pogson

Article in TheRegister:

The commission has accused Intel of being guilty of abusing its dominant market position in at least three separate ways that it reckoned could be linked together as “a single overall anti-competitive strategy”.

It said in a statement:
First, Intel has provided substantial rebates to various Original Equipment Manufacturers (OEMs) conditional on them obtaining all or the great majority of their CPU requirements from Intel.

Secondly, in a number of instances, Intel made payments in order to induce an OEM to either delay or cancel the launch of a product line incorporating an AMD-based CPU.

Thirdly, in the context of bids against AMD-based products for strategic customers in the server segment of the market, Intel has offered CPUs on average below cost.

Meanwhile, AMD voiced its opinion on the Commission’s statement: “Intel has circled the globe with a pattern of conduct, including direct payments, in order to enforce full and partial boycotts of AMD.

“The EU [European Union] action obviously suggests that Intel has, once again, been unable to justify its illegal conduct,” said AMD legal affairs executive vice president Thomas M McCoy. ®

There are those who think such rebates are normal business practice, but they are not. Rewarding a good customer is one thing, blocking that customer from doing business with a competitor is another. Paying a customer to delay using a competitor’s product is also a no-no. Selling products below cost in order to harm competition is also illegal. These sorts of conduct are usually covered by legislation barring anti-competitive behaviour.

AMD has struggled against this behaviour since the early days of the IBM PC. IBM wanted multiple sources of supply for compatible CPU chips so Intel had to permit AMD to play, but as the market took off, Intel tried various strategies to get the whole market. Thank goodness Intel now has only 80% of the CPU market. If they had 95% like another monopoly we know, our CPUs might cost a lot more than they do today. That is what legislation against anti-competitive practices is supposed to promote, sharp competition on price and performance.

I have worked and enquired about employment with places that call themselves “Wintel” shops with a note of pride, believing they have the best suppliers of software and hardware for their systems. The truth is variable. Intel CPUs for a long time sold at a premium because of the Intel logo but when the specs were examined, they needed higher clock rates and more power to do the same workload. All that AMD lacked was production capacity. When the AMD64 family came out, the tables were turned. Intel had no comparable product at any clock speed. Suddently AMD’s prices were high. I had to shop at their bottom rung to have good performance/price. When Intel competed at 64bits last summer, prices dropped like stones. We need that competition to keep both/all suppliers honest. Do not forget, VIA has some excellent processors, too, especially for thin clients and mobile devices.

Intel now has the quad core market to themselves but Intel knows AMD has product coming later this year, so they are aggressively marketing. It remains to be seen how the legal battles will go, but it is a great time to be building Linux terminal servers. IMHO, justice is never done on such matters because the damage has been done to businesses and customers that is not undone by any fine. I do not think anybody but server builders and high-powered workstations need this kind of kit. Grandma can surf quite well on a Duron/Celeron.

You can read about the AMD v Intel suit in the US here. I am not impartial. I like AMD’s products. This is from http://www.amd.com/breakfree/. If you want to get direct to the court documents, click here.

You can read the EU announcment here.

You can read another report here.