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N.Y. AG Files Antitrust Lawsuit Against Intel 169

Posted by timothy
from the monopoly-on-legal-use-of-force dept.
CWmike writes "New York Attorney General Andrew Cuomo has filed a federal antitrust lawsuit against microprocessor maker Intel, alleging that the company engaged in a 'systematic campaign' of illegal conduct to protect a monopoly. Cuomo's lawsuit alleges that Intel extracted exclusive agreements from large computer makers and threatened to punish those perceived to be working too closely with Intel competitors. Intel gave computer makers payments totaling billions of dollars in exchange for the exclusive agreements, and the company threatened to cut off payments to computer makers or fund their competitors when they worked with other microprocessor makers, the lawsuit alleged. Cuomo's lawsuit comes less than two weeks after news reports that the FTC is considering filing a formal complaint against Intel. 'Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,' Cuomo said in a statement. 'Intel's actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices. These illegal tactics must stop and competition must be restored to this vital marketplace.'"
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N.Y. AG Files Antitrust Lawsuit Against Intel

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  • It's the new fad (Score:5, Insightful)

    by Bobnova (1435535) on Wednesday November 04, 2009 @03:53PM (#29984116)
    Lets see if they do a better job on intel then they did on microsoft.
    • ...what - they'll slap Intel on the wrist twice?

      (assuming they're actually found liable/guilty/whatever)

    • My understanding, from talking with Intel employees, is that Paul Otellini [wikipedia.org] is not a good CEO.

      My understanding is that only one member of the Intel Board of Directors [intel.com] has any technical knowledge. How can people with no technical knowledge oversee an enormously high-tech company? They can't.

      Intel board member John L. Thornton was president and CEO of Goldman Sachs Group, it says. Goldman Sachs [rollingstone.com] helped engineer the present financial collapse. Since the collapse, Goldman Sachs has been very profitable. The
      • by hemp (36945) on Wednesday November 04, 2009 @04:29PM (#29984808) Homepage Journal

        I think you misunderstand the purpose of a Board of Directors. Their job is not to oversee the company, that is management's job. Their job is to look out for the interests of the stockholder.

        • How can a board of directors "look out for the interests of the stockholder" if the directors cannot understand the business of the company?
          • Re: (Score:3, Insightful)

            by MBGMorden (803437)

            Indeed. Without knowing SOMETHING about the business of the company about the best they can hope to do is walk around slapping people on the asses and saying "Keep up the profits n' shit!".

            That and making background deals with company to "buy our stuff". They probably don't even know what stuff they're selling, just that they want people to buy it.

          • by ignavus (213578)

            How can a board of directors "look out for the interests of the stockholder" if the directors cannot understand the business of the company?

            Um, drink champagne at board meetings, vote themselves larger fees, do a few sweetheart deals for friends, and plan how to close the next AGM before anyone asks probing questions?

            The interests of the directors may well be in conflict with the interests of other shareholders. Just as the interests of the government may well conflict with the interests of the citizens (e.g. privacy).

          • Easy.

            "Look, we beat the analyst's earnings estimates again! We we rock at this governance thing... lets talk to the compensation committee about increasing our honoraria."

        • Could you explain to me how you think that allowing a company to break the law is looking out for the interests of the stockholder?
        • by ClosedSource (238333) on Wednesday November 04, 2009 @05:35PM (#29986162)

          "Their job is to look out for the interests of the stockholder."

          But the job they really do is to look out for the interests of board members in general (e.g. if you give me big bucks for being CEO then I'll give you big bucks for being CEO through my buddy who sits on your board of directors).

          • by Chris Burke (6130) on Wednesday November 04, 2009 @07:35PM (#29987996) Homepage

            (e.g. if you give me big bucks for being CEO then I'll give you big bucks for being CEO through my buddy who sits on your board of directors)

            If it's even that indirect as to have to be "a buddy" rather than the CEO in question themselves.

            My company's last CEO was, in addition to being Chairman of the Board of the company he headed, also on the Boards of two other companies.

            It's a big incestuous network. When would the board ever not vote to increase executive compensation, or to create actual incentives not to run companies into the ground? Golden parachutes and ever-increasing bonuses (always to "maintain competitive with industry standards" that they created) are a direct result of this inbreeding.

      • Re: (Score:2, Interesting)

        I don't buy it. For Goldman Sachs to have "engineered" the collapse, they would have had to be an omniscient god. They may have taken advantage of it, using political connection to DC, but they certainly didn't plan events to happen. I'm sure they would have preferred the bubble keep going up.

        • "bubble keep going up". Bubbles don't always go up. That's why they are called bubbles.

          Everyone in the financial industry knew two things: 1) The bubble would collapse, and 2) The U.S. government, led by the Federal Reserve Bank, composed of former financial industry executives, would make the taxpayers give money to the financial institutions.

          You didn't read the Rolling Stone article linked in the grandparent comment, did you? Or anything else about Goldman Sachs and the financial collapse?

          Note th
          • by gtall (79522)

            Whatever, the biggest cause of the bubble and subsequent collapse was the American People. They bought what they couldn't afford and allowed certain reptilian species to take advantage of them. The second was the housing industry which never met a development they didn't like and insisted on building McMansions everywhere knowing full well they had way more capacity the market could not sop up. The third biggest cause was government that failed to regulate. The forth was financial institutions that 'package

      • by clampolo (1159617)

        Since the collapse, Goldman Sachs has been very profitable.

        They would have been bankrupt if the US hadn't bailed out AIG. The AIG bailout was just a Goldman Sachs bailout in disguise.

      • Actually, I think Goldman Sachs was profitable all through the crisis, and didn't take any money from the gov. And now we know where all the money went.

    • Re: (Score:3, Informative)

      by Trepidity (597)

      While I wouldn't say the Microsoft anti-trust suit was nearly as successful as many of us Slashdot types would've hoped, it did have some benefits. It managed to stop a few pernicious practices, like exclusive licensing to OEMs (who weren't allowed to sell non-Windows OSs if they wanted to receive the normal favorable OEM pricing). It also provided a sort of hovering threat that forced Microsoft to at least think a little harder about whether they wanted to engage in new anti-competitive practices, since MS

    • Does it strike anybody else as a bit ironic to have Intel being sued for a market segmet defined by Intel?

      There are loads os chips out there tat can easily be made into a GP computer - ARM, MIPS, SPARC, and Cell, to name a few. It's Intel that defines 'x86' and they are being sued in tat 'market'.

      I'm not saying this suit isn't a good idea. Just seems a bit ironic...

      • by Korin43 (881732)
        The market is processors used in general purpose computers, and the lawsuit is because Intel makes sure that that market is the same as the market for x86. Other processors could easily be used in general purpose computers (Cell is not one of them), but the lawsuit alleges that Intel is using bribes to make sure that doesn't happen.
      • Re: (Score:3, Interesting)

        by ClosedSource (238333)

        The recent anti-trust scam is about defining the market so that the target is a monopoly by definition. That's why "server" computers (that might even use PC hardware) were artificially excluded from the "market" so that MS could be considered a monopoly.

        • Or maybe the market for servers really is distinguishable from the market for home computers, or something crazy like that.

          • by Uberbah (647458)

            Yes, just compare the high marketshare of Unix in the server market since it's inception, vs the penetration in the consumer market. More like ClosedMind.

            • It's hard to argue with such are well-begged argument but if Sun was in the "server market" and not the "consumer market", how could they have been harmed by MS's actions in a market they didn't participate in?

              • by Uberbah (647458)

                And your poorly reasoned red herring might have a leg to stand on if we were talking about Sun or if they were the only company or group complaining about Microsoft's monopolies.

                But we weren't, they weren't, so you don't.

                • So those who were found to have been harmed by MS's monopoly aren't relevant to a discussion of whether there really was a monopoly? Interesting logic.

              • Sun was harmed by Microsoft's actions against Java on the Desktop. Microsoft used it's position to implement Java to keep the version on Microsoft's OS from working correctly with Sun's other licensees. Microsoft voluntarily signed a contract with a competitor to get Sun Java on it's desktop OS, then made the licensed product perform poorly when Microsoft's created it's own product. Nobody MADE Microsoft sign that contract (but because Microsoft had a near monopoly on desktop OS it was good to have), but on

                • And this is based on the fact that Java was a product that ran both on servers and on desktops. So to support the contention that MS was a monopoly, Sun's market share was excluded, but in order to claim that MS had harmed them, Sun had to be considered in the same market. Thus the contradiction.

                  Just to set the record straight on Java on Windows, it ran faster than Sun's own JVM. MS however did make a major blunder. If they had simply ignored Java instead of legitimizing it, we probably wouldn't still be ta

    • If AMD ends up getting money from this and you don't, it'll be exactly like the job they did on Microsoft.

    • All they had to do was watch that 30 minute training video on corporate ethics, but I guess they were too busy. What a shame.
    • Lets see if they do a better job on intel then they did on microsoft.

      Holding companies accountable for their actions?

  • Yawn. (Score:4, Interesting)

    by DoofusOfDeath (636671) on Wednesday November 04, 2009 @03:55PM (#29984168)

    These illegal tactics must stop and competition must be restored to this vital marketplace.'

    With that language, I wonder if he's just going for a consent decree regarding future conduct, and maybe a slap on the wrist. I wonder if this will in any way lead to AMD being made whole.

    • I doubt it - AMD decided to drop its fabs without Intel's help.

      Yes, for awhile the Opteron series was kicking Intel ass all over the map. But, AMD never really did that much with it after awhile, and Intel finally removed head from ass to come up with Core. I'm not seeing how things could've been that much different. Once Core came out, all bets were off (and thus NetBurst died a well-deserved death...)

      Even on the Apple side of things, well... Apple started looking at the x86 in the first place, largely bec

      • Re:Yawn. (Score:5, Insightful)

        by Pulzar (81031) on Wednesday November 04, 2009 @04:28PM (#29984784)

        Yes, for awhile the Opteron series was kicking Intel ass all over the map. But, AMD never really did that much with it after awhile, and Intel finally removed head from ass to come up with Core.

        I guess the point here is that even though Opteron was kicking ass, AMD couldn't get past 25% or so marketshare, thanks to what Intel was doing to preserve its monopoly. It's hard to compete when your competitor can give Dell a billion dollars to stop them from buying any AMD.. (or threaten "jihad"!)

        If AMD was fairly allowed to sell the products they made a few years back, they might have had the resources to keep their fabs and fund research into next gen CPUs.

        • Assuming the allegations were true, how can you explain AMD's continued presence in OEM machinery anyway? HP (for instance) certainly didn't stop selling AMD-based desktops, servers, etc., and Intel+HP are like fraternal twins.

          Also, AMD still had gobs of cash with which to spend on R&D, even with 25% of the market (Hell, Apple has less than 10% of its market, and look how they're doing). Also, consider that Opterons were mostly relegated to servers and higher-end desktops (and IIRC not laptops, low-end

          • Assuming the allegations were true, how can you explain AMD's continued presence in OEM machinery anyway? HP (for instance) certainly didn't stop selling AMD-based desktops, servers, etc., and Intel+HP are like fraternal twins.

            The AMD OEM machines at BestBuy, etc that HP is/was selling are mostly low-end or midrange consumer desktops at the bottom of the profit curve. The higher margin, higher priced machines were almost always Intel.

            You see the effects of Intel's manipulation in the corporate market... wit

          • by Pulzar (81031)

            Assuming the allegations were true, how can you explain AMD's continued presence in OEM machinery anyway? HP (for instance) certainly didn't stop selling AMD-based desktops, servers, etc., and Intel+HP are like fraternal twins.

            You're confusing HP with Dell. Out of all major OEMs, HP offers by far the most AMD solutions.

            How do you explain that anybody sold AMD at all? Well, Intel couldn't offer enough to convince everybody to stop selling superior AMD products. If you read the lawsuit, you'll see that Dell w

        • by Eskarel (565631)

          As much as I like AMD they killed themselves. Lots of companies bought AMD chips, both in servers and in desktops. For quite a while after the Itanium debacle and Intel's architecture mistakes they were the preferred chipset. They gained massive amounts of market share. That said, market share takes a long time to acquire in this sort of market, most machines have a replacement cycle of 3-4 years or more and they weren't so massively good that they were getting every single sale. Under those circumstances 2

  • Find/Replace (Score:3, Insightful)

    by Caviller (1420685) on Wednesday November 04, 2009 @04:02PM (#29984294)
    Ah if only I could just use find/replace and find all 'Intel' in the article and change them to 'ISP X' then it would be a good day... Seriously, they should be going after the much more monoploistic ISPs in this country then Intel.
  • by surmak (1238244) on Wednesday November 04, 2009 @04:05PM (#29984372)
    I wonder if this has anything to do with AMD (err Global Foundaries) dropping a few billion on the construction of a plant a few miles from Albany?
    • by jellomizer (103300) on Wednesday November 04, 2009 @04:23PM (#29984686)

      Shhh Quite. The government only has our best interest in mind... Nothing as petty a bringing billions of dollars to an ailing local economy that is right next to the state capital.

    • Re: (Score:3, Insightful)

      by Gudeldar (705128)
      Does that change the facts of the case?
      • In some ways yes. It means there may be motivation to legally hurt intel for the sake helping their own local economy. Lets use food for an example as food sales tends to be hard to have monopolies on.

        Lets use Dole and Delmonte as an example they compete with each other and product similar products. Now lets say I live in a good farming area... (I currently don't as I live actually near Albany, NY) And they open a Dole plantation in the area has boosted my local economy. However Delmonte competition w

    • Re: (Score:3, Funny)

      by Penguinisto (415985)

      ...this is New York we're talking about, not Chicago. They're (well, supposed to be) more subtle about such things.

    • by brxndxn (461473) on Wednesday November 04, 2009 @04:48PM (#29985172)

      I'd say that viewpoint, which seems to be the mainstream on Slashdot, is like taking a single snapshot of a baseball game and acting like you can lay out the stats.

      This antitrust lawsuit is filed after a precidence of antitrust lawsuits from other countries against Intel. Right now, if we take a snapshot of how Intel is competing, Intel may be playing fair. However, in the past - especially during the relatively long time (in the IT world at least) that AMD had the clear technology lead - there are quite a few reasons why there should be an antitrust lawsuit.

      First of all, Intel only has the technology lead right now because Intel has more funds to dump into research and development. However, in the past, AMD leveraged themselves to put enormous amounts of funding into the Athlon and they came out with a clear technology lead. The market share barely followed. AMD had trouble selling their superior processors. The largest computer maker, Dell, was an Intel-only company. It's easy to be ignorant and blame bad execution on AMD's part - and maybe there was. But, there is some damning evidence that Intel was not playing fair. For example, AMD tried to give away 1 million processors to HP - and these were faster processors than Intel's at the time - but HP declined. Intel's pricing model was structured in a way to make it so that using any competitor in any small percentage would be more expensive than being 100% Intel only. They did this by using 'marketing rebates' that would directly correlate with the percentage of Intel processors sold.

      Face it.. the P4 sucked. It did nothing but suck for years. It was an awful processor. Yet, somehow, Intel kept its exclusive agreements long enough to keep AMD from gaining significant market share - which would have in turn allowed AMD to keep spending on R and D which would have allowed AMD to remain competitive. It takes YEARS to develop the next best processor. Intel is only sitting where it is because it successfully choked AMD years ago.

      For a few quarters, AMD was kicking Intel's ass - but it should have been kicking way more ass than it was. Also, AMD's financial situation is a result of leveraging themselves in order to compete with Intel and then not receiving the market benefits that normally come in a competitive industry with a technology lead.

      Further, it is hard to dismiss threats as evidenced in emails from Intel against business with competitors. Or, you can shove your head in the sand and call this entire complicated situation as all sorts of 'red herrings.'

      • by DomNF15 (1529309)
        I'll agree with you on the shady practices of Intel when the Athlon line was launched - but I don't think a one hit wonder like that should magically position AMD as the top chip maker. There are probably other reasons why AMD didn't enjoy a greater deal of success even though it had, for a limited time, a superior product. Brand recognition is one reason. Reluctance of professionals trusting AMD processors in server grade machines could be another. The P4 may have sucked but keep in mind that previousl
        • by Chris Burke (6130) on Wednesday November 04, 2009 @07:59PM (#29988290) Homepage

          I'll agree with you on the shady practices of Intel when the Athlon line was launched - but I don't think a one hit wonder like that should magically position AMD as the top chip maker.

          Nobody said they should have been the top chip maker -- that would have been impossible simply based on AMD's manufacturing capacity relative to Intel's. They should have gotten a lot more marketshare than they did, though, and that difference would have been huge for AMD. Companies like Dell and HP wanted to sell (more) AMD processors based on their merits, but the financial punishment that would come from Intel made it not worth it. That's a big deal.

          Brand recognition is one reason. Reluctance of professionals trusting AMD processors in server grade machines could be another. The P4 may have sucked but keep in mind that previously AMDs chips sucked as well, and for a long time the only thing AMD was good for was reverse engineering Intel designs

          Yes but those days were also long gone. AMD earned recognition as a chip designer in their own right with K6 as a budget processor, earned recognition as a chip maker capable of going toe-to-toe with Intel with the K7, and then knocked it out of the park with K8. The true customers of Intel and AMD, the OEMs, were well aware of AMD's "brand" and had no qualms about using them in server parts... Except for the interference by Intel. Did you see the email from Dell to Intel where they're basically telling intel that they're getting killed in the server market and Intel better do something? And intel's response is that the $billion they'd given Dell should compensate for their competitive disadvantage? Customers wanted to use AMD, but Intel made sure that AMDs marketshare was artificially limited.

        • Re: (Score:3, Insightful)

          by drinkypoo (153816)

          I'll agree with you on the shady practices of Intel when the Athlon line was launched - but I don't think a one hit wonder like that should magically position AMD as the top chip maker.

          let's look at some realities. AMD's 386 and 486 beat the pants off their intel equivalents and the 586 was fairly competitive with the pentium. The K6 is a far superior chip to the P2 but it's a crap 386, but because of intel's hold nobody put effort into supporting K2 and it flopped; by the time the K6/3 came out with real x86 compatibility (think FPU) it was too late.

          Meanwhile, from the point the Athlon came out until the time the Core 2 Duo got its first price drop, AMD has had a clear technology lead ov

    • Nah, far more likely to be related to IBM's Headquarters in Armonk. Does IBM still do any fabrication in Poughkeepsie?

    • Of course. All things are connected in some way.

      It also has something to do with Intel using illegal tactics. I'm shocked it took building a new multi-billion dollar fab to get anyone interested.

  • Hey lets file a couple of lawsuits against some companies and maybe I can be governor... strike the heroic looking photo of the AG "going after" evil Intel.

    This lawsuit, like anything else our political classes do (regardless of party), is total b.s.

  • This was a pretty stupid move on Intel's part, they didn't even need to act in this way because they seem to have really pegged the market precisely in going after the performance/efficiency angle with that last few years worth of chips. I should know, I was an AMD fan throughout the late 90s and early 00s but for my newest PC I went with an Intel Core Duo2 because they really are that great in terms of speed versus power consumption. Not to mention that during AMD's disaster with their Barcelona quad cor [zdnet.com]
    • Well because the tides can shift again.

    • by DrWho520 (655973)
      You answered your own question. The K8 product line beat anything Intel was pushing during that time frame. It should have given AMD a sizable portion of the market share. The performance was that much better. In a free market, the obviously better product should take the market share, and as fast as the IT market moves, there should have a perceptible wave in market share and profit flowing into AMD. Who knows where AMD R&D would have gone with the influx of cash.
  • Off-topic and not for nothing...

    For all the acronym- and jargon-laden summaries which barely qualify as English, and inevitable posts of 'WTF?', and the even more inevitable follow ups of 'Google, ya wanker," is it really necessary to qualify Intel as a "microprocessor maker"?

    Anyone here not know what Intel is or what it does? Anyone?

  • I would like to know what the Libertarian position is on monopolistic competition?
    I believe one ought be free to do what one wishes with one's money, and it follows that paying someone (some people call it bribery) to persuade them to a position is fine. The problem is i haven't studied this and, not being an expert, it's difficult for me to see negative externalities that may ensue should this be brought into practice. Any advice?
    • by nomadic (141991)
      I believe one ought be free to do what one wishes with one's money, and it follows that paying someone (some people call it bribery) to persuade them to a position is fine. The problem is i haven't studied this and, not being an expert, it's difficult for me to see negative externalities that may ensue should this be brought into practice. Any advice?

      The idea of a monopoly strikes at the heart of many libertarian's ideology. Their usual response is to simply claim (then angrily insist) that monopolies a
  • I never buy Intel CPUs. For a very long time AMD have had equivalent technology at a much better price.

    • do you have a source for that claim? it was probablly true when the athlon64/opteron showed up while intel was still on P4 (and the P4 based xeons) but more recently all the reports i've seen say that intel is ahead in top end performance and performance per watt and doing pretty well in the performance per dollar as well.

  • My boss tells me a few years ago Intel didn't have paging in their chips. So instead of working out how to do it they flew people all over the world trying to convince the best and the brightest that paging just could not work and segmentation was a better solution. It was a fools errand and they failed. Good thing too or the whole IT world would be 2 or 3 decades behind right now.

  • Delaware? (Score:3, Interesting)

    by NullProg (70833) on Wednesday November 04, 2009 @05:30PM (#29986046) Homepage Journal

    Cuomo's lawsuit, filed in U.S. District Court for the District of Delaware Wednesday, alleges that Intel extracted exclusive agreements from large computer makers and threatened to punish those perceived to be working too closely with Intel competitors.

    Why is the New York AG filing lawsuits in Delaware?

    Enjoy,

  • by amiga3D (567632) on Wednesday November 04, 2009 @05:35PM (#29986156)
    Why bother? Intel is just as nasty as M$. If they couldn't make microsoft behave why do they think they can make Intel do right?
  • Fab Capacity (Score:2, Insightful)

    by PhrstBrn (751463)

    I think that people are either forgetting or ignoring this point:

    AMD doesn't and didn't have the fab capabilities to take the market overnight. It would take a long time to start eating away the market share that Intel has. The amount of fab capacity that Intel has is enormous. They could stockpile months of chips if they wanted. AMD was selling chips as soon as they came off the production line.

    AMD could not have gone to Dell and said "I'll supply all of your x86 chips cheaper than Intel, buy mine inst

    • I don't understand. Building new plants and ramping up production is insurmountable? Obviously it takes significant time and investment, but what does that have to do with anything? AMD could have made a deal to supply all of Dell's chips in just a couple years, couldn't they? Seems you're talking about the pace of changing vendors and the pace of the business in general. While the issue here is the behavior of the competition in trying to prevent any change from ever taking place. Certainly the more

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