Intel gave Dell 6 Billion dollars not use AMD chips?

[techs]

http://www.tomshardware.com/news/Intel-Antitrust-US-AMD-Dell,9007.html

Intel Accused of Giving Dell $6 Billion in Perks

Intel is accused of giving PC makers substantial amounts of money in exchange for exclusivity.

The State of New York has filed a lawsuit against Intel accusing the chipmaker of paying vendors billions of dollars in rebates to not use AMD chips. Xbitlabs reports that IBM, Dell and HP are among the companies that received rebates, with Dell receiving roughly $6 billion over five years.

According to lawsuit, Dell was paid rebates based on how many CPUs it bought. Xbit reports that the percentage of the rebate could fluctuate and it reached 16 percent while Dell contemplated using AMD chips. Dell allegedly received $6 billion dollars between 2002 and 2007 and the Wall Street Journal reports that these payments sometimes exceeded Dell's profits with payments for one fiscal quarter constituting 116 percent of Dell's reported net income.



Let me make one thing perfectly clear. If Intel wants to give me money not use AMD chips they better be prepared to pay big.

 

[ScottyB]

Intel can pay me any day of the week to use their chips.

 

[SunSamurai]

Already bought my AMD Athlon II 240.

And now I'm even more glad I did.

 

[SpiderWiz]

This doesn't surprise me.

 

[Freshgeardude]

they will make more money after fines when AMD closes their company. sleezy but it works

 

[Fenixgoon]

if they can prove this.. wow, intel is going to get fined out the ass.

 

[ViviTheMage]

Intel chips are better then AMD 🙂

But man, if they do have a paper trail, they are screwed!

 

[techs]

Intel chips are better then AMD 🙂

But man, if they do have a paper trail, they are screwed!

Would Intel chips be better if AMD had been able to sell to Dell and take that money and put it into developement?

 

[zerocool1]

if they can prove this.. wow, intel is going to get fined out the ass.

They're already being fined in the EU IIRC.

 

[Barfo]

Intel chips are better then AMD 🙂

But man, if they do have a paper trail, they are screwed!

They were not back in the Pentium 4 days, that was the point of those perks.

 

[LTC8K6]

A rebate would be after you bought the chips though. AMD could have made a similar offer for all we know, and Dell just took the better one.

I think NY is trying to stem the red ink in it's budget with a nice fat fine. :biggrin:

 

[LTC8K6]

Why aren't they suing the PC makers?

 

[microAmp]

http://www.businessweek.com/technology/content/nov2009/tc2009114_975298.htm

Business Week article on it.

 

[ViviTheMage]

They were not back in the Pentium 4 days, that was the point of those perks.

Back in 2002, i'd agree, but once conroe came out, AMD lost it all.

But I can see how if these incentives were true, why INTEL had more money for development then AMD did.

 

[SunSamurai]

Intel chips are better then AMD 🙂

Yoiu cant get away with saying crap like "Intel chips are better then AMD 🙂" on a tech site.

Intel dominates the highend, AMD dominates the lowend.

My 60$ Athlon II has no Intel counterpart, unless you take a 15% performance hit.

 

[Nik]

I don't really care whose palms they greased. I don't buy pre-built PCs.

 

[darkxshade]

Since Intel pretty much dominates right now, any "fines" will no doubt be passed onto the consumer through higher average selling prices that are still competitive vs AMD.

 

[Zee]

how does a NY attorney general get involved in a case from two companies that are based completely in the other side of the continent?

wow, someone wants to be governor/president.

 

[her209]

how does a NY attorney general get involved in a case from two companies that are based completely in the other side of the continent?

wow, someone wants to be governor/president.

Because both companies do business in the state of NY.

 

[techs]

how does a NY attorney general get involved in a case from two companies that are based completely in the other side of the continent?

wow, someone wants to be governor/president.

Actually people need to be asking why the Bush administration didn't do this.

 

[mchammer187]

Why is this any different than DirectTV being the only Sunday Ticket Carrier. Xbox360 being the only game console with Netflix or AT&T being the only iphone carrier.

Is it because it wasn't disclosed to the public?

This is no different than giving them a price discount such that offering the competitor is not worthwile which seems to happen all the time in business.

 

[ElFenix]

A rebate would be after you bought the chips though. AMD could have made a similar offer for all we know, and Dell just took the better one.

I think NY is trying to stem the red ink in it's budget with a nice fat fine. :biggrin:

rebates are allowed for meeting certain volumes. rebates are not allowed for not purchasing the other guy's products when you've got market power.

Why is this any different than DirectTV being the only Sunday Ticket Carrier. Xbox360 being the only game console with Netflix or AT&T being the only iphone carrier.

Is it because it wasn't disclosed to the public?

This is no different than giving them a price discount such that offering the competitor is not worthwile which seems to happen all the time in business.

like i said, there is a difference between giving a price discount based on volume and a price discount based on buying all your stuff from one place when that vendor has market power. yes, all contracts are restraints of trade. but only those involving firms wielding market power to bend the market to their own bottom line are a violation of anti trust laws.

the difference between what you've listed and this is that the other things, with the potential exception of att's exclusive iphone deal, don't involve the use of market power to achieve ends. (att knows this, and so claims that the relevant market is as broad as possible, so they'll claim that in the grand scheme of the whole cell phone market, the iphone is a tiny tiny &#37😉.

how does a NY attorney general get involved in a case from two companies that are based completely in the other side of the continent?

wow, someone wants to be governor/president.

AMD's subsidiary just broke ground on a new chip fab in NY.

 

[darkxshade]

AMD's subsidiary just broke ground on a new chip fab in NY.

Oh how ironic would it be to find out AMD is paying off NY to fine Intel for anti-competitive practices? I wouldn't call it hypocritical but it's like one giant circle jerk... Intel paying PC distributers to screw AMD and AMD paying NY to screw Intel.

 

[techs]

Oh how ironic would it be to find out AMD is paying off NY to fine Intel for anti-competitive practices? I wouldn't call it hypocritical but it's like one giant circle jerk... Intel paying PC distributers to screw AMD and AMD paying NY to screw Intel.

Yes, it would be ironic. If you had any evidence to show for it.

The real question is why we Americans have forgotten what happens when companies that are hugely dominant in their field use their economic power to prevent competition.

The bad old days are here again.

 

[spidey07]

I'm not seeing anything wrong here at all. This is normal when you sign an agreement of this magnitude that incentives are offered to stay exclusive. Dell could use AMD to entice better deals from intel. This is totally normal and happens all the time.

But there's nothing wrong here, it's just business.