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Mon, Jan 14, 2008 13:22 EST

NY Goes After Intel, But Why?

Topic: Infrastructure

Blog: Inside Tech

Current Rating: 5 Comments: 8

New York state Attorney General Andrew Cuomo announced late last week that he's issued a subpoena and started an investigation of whether microprocessor giant Intel ran afoul of state or federal antitrust laws as it priced and marketed its chips. Some reporters promptly worked themselves into a lather about this story, re-hashing the now famous antritrust suit against Microsoft and asking if Intel would be the next tech titan to suffer through a long antitrust trial. As someone who closely covered Intel and its upstart rival, AMD, throughout the late 90's, I'm scratching my head about several questions related to this development. 

First of all, why is it Cuomo and New York state going after Intel? It's not the Federal Trade Commission. It's not California, the home state of both companies. It's New York.

This simply smacks of politics to me. Grab some national headlines before you make your next run for office. Raise your profile. Get consumers riled up about frustrating computers? Maybe some of each. As one colleague pointed out to me, perhaps it's not surprising that Cuomo's taking a political cue from former New York state attorney general Eliot Spitzer, who certainly took a broad view of what a state AG's office should pursue, and mugged to many a TV news camera about those cases, prior to his successful run to the New York governor's office.

Second, let's keep this possible Intel case in perspective. Sure, Intel faces some other investigations right now, in Japan, Korea and the European Union; there's also a pending civil case that AMD has filed in Delaware. But one step at a time: As Businessweek and others point out, the case that Cuomo's discussing won’t be easy to make.  

Technology users had good reason to be quite interested in the outcome of the Microsoft antitrust case. But I'm not so sure that the Microsoft and Intel situations compare well. What's in this Intel investigation for corporate IT buyers and consumers?

Even theoretically, would an antitrust ruling against Intel, if indeed New York was to bring a formal case, change much in today's chips market or PC market?

Fact is, AMD has made huge progress against its tough-as-nails rival during the last few years. 

While back in the 1990's, you could find AMD chips only in PCs from smaller companies, you can now buy AMD-powered PCs from the biggest of the heavyweights, including HP and Dell.

And while AMD fought long and hard for respect, by 1999, AMD had proved in the press and in the marketplace that it could deliver competitively priced, high-performing products.  

Today, PC chips deliver more raw computing power for less money than we could have imagined in the late 90's, when I covered the intense race between AMD and Intel to power a 1GHz PC. And the bottom line is simple, and sweet: Even if you buy one of the least expensive, sub-$500 PCs available today, whether it has AMD or Intel inside, you will take home more processing power than

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Average (1 vote)
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Mon, Jan 14, 2008 15:24 EST
Anonymous user
Posted by: Anonymous
Rating: 10

While saying that politics plays no role in this is naiive, also consider that NY AG Cuomo - or any other government official for that matter - would not take on a company the likes of Intel if they weren't supremely confident that the evidence they already had was enough to score a huge, high profile conviction.

We've seen this antitrust movie before with Intel. They were found guilty of breaking Japan's antitrust laws a couple of years ago by forcing Japanese PC makers to limit their business with AMD or prevent any business at all with AMD.

The Europeans and the Koreans obviously feel very confident that the evidence they collected from Intel and PC makers themselves is enough to convict Intel also.

And none of these forces answer to AMD - they answer to their citizens, who are being screwed in the Intel monopoly equation one way or another.

 
Mon, Jan 14, 2008 15:35 EST
Anonymous user
Posted by: Wut
Rating: 90

Where is AMD planning to build its new factories?

Surprise... NEW YORK!

One would be holding his nose if not smelling a big FISH in all this.

I call B.S.. The proper jurisdiction for this case is California, not New York.

 
Mon, Jan 14, 2008 15:43 EST
Anonymous user
Posted by: Maloney
Rating: 30

There is no "proper" jurisdiction for this market, because the MPU market is GLOBAL. Where a company is headquarted is irrelevant in the 21st Century global economy.

There's no way Cuomo or any other NY state politician would be sticking their neck out - especially this high profile - if they weren't sitting on a compelling stack of evidence that Intel is breaking antitrust law.

Besides, NY's AG office has always been out in front on enforcing consumer protection - that's nothing new.

Like anonymous pointed out, the Japanese and Koreans filed antitrust charges against intel and the Japanese have already convicted. You don't see AMD building Fabs in Japan or Korea do you??

 
Mon, Jan 14, 2008 17:02 EST
Anonymous user
Posted by: Wut
Rating: 90

What Japanese "conviction"? The JFTC amounted to a RECOMMENDATION to Intel. This muddling of FACTS points to FUD that's being spread around by AMD fanbois.

WHAT evidence? I call BS. I dare you to go and look up the news yourself. Even the OEM customers _themselves_ saw no wrongdoing (and no, don't give me BS about indentification because the OEM name is not disclosed to Intel)

Facts, not desperate fanboi and stockpumper crap.

 
Mon, Jan 14, 2008 21:01 EST
Anonymous user
Posted by: TheTruth
Rating:

Wut, you're simply woefully misinformed and hung-up on the term "Recommendation." A JFTC Recommendation is in fact a ruling and synonymous with a conviction.

For those who actualy are interested in the facts, you can read an English translation of the Recommendation against Intel on the Japanese Fair Trade Commission Web site here:

http://www.jftc.go.jp/eacpf/cases/intel.pdf

For what it's worth Intel DID NOT CONTEST THE RULING.

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