There seems to be fierce competition in the chip market between Intel and Advanced Micro Devices (AMD). Claims have been made from both AMD and others that Intel is abusing its dominant position in the European market. Back in 2002 Europe’s top antitrust regulator closed an investigation regarding this since VIA Technologies of Taiwan, which together with AMD had complained about Intel’s practices, backed out of the investigation. The Commission said that they didn’t have enough evidence to pursue AMD’s complaint until it brought forward new evidence in 2003.
After having sent out questionnaires in 2004 to companies in the computer industry asking about Intel’s behavior in the market, a decision to conduct raids at Intel offices as well as other computer manufacturers were taken.
The story has been going on for many years and the European Commission added three new charges against Intel this summer. If Intel doesn’t change its behavior The Commission is threatening Intel with fines that could be in the region of 10 percent of its global revenue.
So, what’s Intel up to? Well, according to AMD it has given the largest personal computer retailer in Germany, Media Markt of Germany, substantial rebates in return for only selling Intel-based computers. The company is also accused of paying computer makers for scrapping or delaying the launch of machines fitted with AMD chips, and of selling its chips for server computers at below cost to large customers such as governments and universities. The response from Intel, based in Santa Clara, California, is that their actions are “lawful, pro-competitive, and beneficial to consumers”.
There is indeed a fierce competition in the market but these actions, if true, will certainly harm consumers in the long-run if Intel will be the only producer left. Paying someone to delay the delivery of your competitor’s products sounds a bit fishy, and if there are evidences showing that, Intel should probably be punished for it. Selling below production cost is a tricky one though. What do you make of that?
Source: http://www.nytimes.com/2008/07/18/technology/18chip.html
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