Posts tagged with antitrust

Last week I blogged at length about the implications of this week’s European Commission ruling against Intel.  Since the ruling I’ve been struck how some commentators have suggested the EC is being overly restrictive or anticompetitive, while others have suggested the ruling isn’t likely to have much if any lasting change.  Well, if you were a consumer in Europe during the period of the EC’s investigation, you faced reduced choice and inflated prices directly because of Intel’s conduct – that’s pretty clear.

Is there any democratic country in the world where it would be legal to do what Intel is accused of having done?

Why are these commentators blaming the enforcement agency, rather than celebrating for whose been hurt by Intel’s illegal conduct:  the consumers?

I’m not a lawyer (never even played one on the web) but the good news is you don’t have to be an antitrust expert to understand that the EC, through a multi-year investigation that included thousands of pages of evidence from Intel and its customers, found ― quite simply: Intel broke the law.

Competition is a good thing, and selling in the technology industry is very, very competitive (which, by the way, is good for you).  But leveraging your position and threatening to withhold rebates to restrict your customers’ ability to sell products based on your competitor’s technology isn’t competitive.  It’s illegal.

If I didn’t like a good fight I wouldn’t be working in the technology industry.  But I like a fair fight.  Intel doesn’t, and the EC ― and the Korea Fair Trade Commission before them, and the Japan Fair Trade Commission before them ― have gotten it right by taking Intel to task for it.

If you’re not shocked and disappointed that one of the technology world’s bellwether companies has methodically engaged in anti-competitive and anti-consumer conduct, here’s why you should be:

·         The EC stated that, “for the 5% of computer manufacturer B’s business that was not subject to the conditional rebate… Intel made… payments to computer manufacturer B provided that [it]:

a.      Sold AMD-based business desktops only to small and medium enterprises

b.      Sold AMD-based business desktops only via direct distribution channels (as opposed to through distributors) and

c.       Postponed the launch of its first AMD-based business desktop in Europe by 6 months.”

It’s simply shameful that after having restricted a customer to buy no more than 5% from the competitor in one product line, a company as powerful as Intel would constrict five percent of a customer’s product line to protect its monopoly.  I thought innovation was supposed to enable you to keep your market share.

·         And the EC gives several examples of computer manufacturers being forced to delay product launches, lest they lose their “rebates.”

d.      “Intel made payments to computer manufacturer E provided that this manufacturer postponed the launch of an AMD-based notebook from September 2003 to January 2004.”

e.       “Before the conditional rebate to computer manufacturer D… Intel made payments to this manufacturer provided that it postponed the launch of AMD-based notebooks from September 2006 to the end of 2006.”

So: Intel leveraged payments to prevent companies from offering AMD-based products to its customers.  Consumers faced less choice and artificial prices as a result.

Who should pay for this injustice?  Easy, Intel should pay the EC’s fine and cease their illegal conduct. Consumers will win when the market is open to innovation.

If you believe that, then you should demand that Intel honor the EC’s ruling and change their anti-competitive practices.  This is pretty straightforward stuff.

Oh, and for those who suggest that perhaps this isn’t the best time to punish Intel ― let me ask you this: when is the right time to break the law and go unpunished?

Nigel Dessau is senior vice president and chief marketing officer at AMD. His postings are his own opinions and may not represent AMD’s positions, strategies or opinions. Links to third party sites are provided for convenience and unless explicitly stated, AMD is not responsible for the contents of such links sites and no endorsement is implied.