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Intel in Antitrust Trouble in Japan
Posted by
samzenpus
on Thu Mar 10, 2005 06:00 AM
from the big-and-illegal dept.
from the big-and-illegal dept.
vincecate writes "The Japan Fair Trade Commission has ruled that
Intel violated antitrust laws in Japan.
Giving customers discounts based on the volume of your products
they purchased is good business.
However, Intel was adjusting customer discounts
based on the volume of competing products they purchased,
which is not legal.
After the ruling,
AMD responded saying, "We encourage governments around the globe to ensure that their markets are not being harmed as well".
While
Intel responded
saying, "Intel continues to believe its business practices are both fair and lawful."
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So carrots are legal, sticks are not (Score:5, Interesting)
I know very little about law in this area. Is it the same in the U.S. and Europe? I would like to think it is but then considering today's climate I wouldn't be surprised if you it wasn't!
Oh regarding Intel's comment that it "... continues to believe its business practices are both fair and lawful.". It might just be legal in some countries but how is it fair to use your dominant position to prevent other companies from being able to compete with you? A statement like that is just a bare faced lie. If the situation was reversed you can bet Intel would kick up a fuss. I'm not saying I'm surprised it is just irritating.
Re:So carrots are legal, sticks are not (Score:5, Insightful)
Statements like this are not meant to be factual. They are meant to influence opinions. "continues to believe" is a phrase that should warn you that a politician or a company is lying to you. Always replace it with "persists in claiming".
Parent
Re:So carrots are legal, sticks are not (Score:4, Insightful)
Intel when up from 78% to 89% of the market.
Now the bases is same as Microsoft did to PC here in the US; "If you sell the others products, we will NOT give you money".
What is large market share in your business, if you sell another's products, you loose money that makes you profitable.
That is MOB (as in the market) talking.
Parent
Re:So carrots are legal, sticks are not (Score:4, Insightful)
Of course not, A) damaged goods are not an acceptable good and B) You're the buyer, you can do what you want anyway.
Now lets say you go to the computer store and the manager says "You own an AMD, so that video card in your hand will cost double" would you call that a fair trade practice? If they're the only computer store in the country?
Parent
Re:So carrots are legal, sticks are not (Score:4, Insightful)
Film at 11. [maxbarry.com]
Parent
What!? (Score:5, Funny)
Hey Intel... (Score:3, Interesting)
See how you and Microsoft are on the same side of it?
That's a bad thing.
Re:Hey Intel... (Score:4, Insightful)
I always think of it like this: they're not immoral, they're amoral. They just don't care about right or wrong, they can't afford to, because that's how the system works. I'm glad that they got caught, and I think we need much more government constraints put in place and have them actively enforced to prevent things like this from happening.
Of course, for that to happen, I'd need to buy myself a politician or two... and I'm only a poor student... care to give me a donation anyone?
Parent
Standard PR response (Score:5, Insightful)
That's how PR hacks are taught to respond. When, for example, your CEO is stealing money, your PRish role is to go out and with a straight face say: "The core Value of our company is Honesty. We will introduce a Business Codex to emphasize our commitment."
Woo! (Score:5, Funny)
Does this mean that we get to start referring to Intel as a "convicted monopolist" in every /. article about the company, just like we do for Micro$oft??
That's awesome!
Intel in Antitrust trouble... in Japan! (Score:3, Funny)
The meme works.
Last sentence was edited out by slashdot editors (Score:5, Interesting)
What's missing the from Intel statement (Score:5, Insightful)
If they keep on going like that, pretty soon we'll have Intel turn into a religion.
I'll give you an example... (Score:5, Funny)
It's a rich and vibrant culture those Japanese have, I tell you.
Re:I'll give you an example... (Score:4, Funny)
Parent
Dell and AMD (Score:4, Interesting)
I mean the Intel CEO called Dell's CEO and said: "If you offer a single system with AMD processors we'll raise the prices on our stuff". Of course both will deny.
I strongly suspect something like this: in big business relationships, you can never be paranoid enough. The reality is much worse than anything that most people could start to imagine.
For example, AMD has been the only source for mobile 64 bit processors for quite some time. But Intel can prevent Dell from entering the market until they are ready, and maybe also pressuring Microsoft in the same direction, so that both Dell 64 bit portables and 64 bit Windows will be available only when Intel has all 3 catergories (mobile, desktop and servers) covered.
Intel continues to believe... (Score:4, Funny)
in other news, intel continues to believe the f00f and pentium fdiv bugs were really just user error...
Re:Give me a rational reason why this is a problem (Score:5, Insightful)
Intel: "if you buy 1 chip it costs $500"
Intel: "But if you buy 10 it costs $450 per chip"
Intel: "If company X wants to buy 10 then it will cost them $480 per chip because we found out they bought an athlon chip last week"
THAT is not on!!
Parent
Re:Give me a rational reason why this is a problem (Score:5, Informative)
Obviously if a company is buying more of a competitor's products then they're buying less of yours, so your own are more expensive to them because they are buying in lower quantities. that is simple grade school economics."
The problem arises when somebody tries to use their position as the established leader to keep other companies from establishing a marketshare, thus using their dominance to maintain a monopoly. Not as much of a problem with Intel as it would be with a company like Microsoft (as AMD is a very strong competitor), but still not a good idea to let bad practices get started.
Again, basing your prices off how many of YOUR chips they buy is okay. What this alleges is taht they are also factoring in how many of the competitor's chips they buy, which is not. How many AMD chips a company buys is none of Intel's business, and shouldn't affect prices.
Simple example. Company A makes 100,000 computers, and uses Intel for 50,000 and AMD for 50,000. They should be charged the exact same rate as Company B, which makes only 50,000 computers but uses Intel for all of them. The accusation is that Intel would instead charge Company B a lower rate, because while they purchase the same volume they don't purchase any from AMD.
As somebody else said, the carrot is legal, the stick is not.
Parent
Re:Give me a rational reason why this is a problem (Score:4, Interesting)
Two years ago, in the company I worked for, we needed to buy 600 cheap servers from Dell for an embedded application that we had to install at our clients. The price was really very important. If we couldn't get them at the right price, our project was not going to make it.
Dell did everything to lower the price. I remember they went down as much as 50% but it was still not enough.
We were about to cut the project when Dell called us and told us that the only way to reduce the price of the 600 servers further was if we signed some sort of paper saying that we used AMD processors in our previous project and this was a replacement project. This way they could get a big rebate from Intel under a certain program provided by Intel.
I just couldn't believe that Intel was ready to go that far...
Parent
Re:Give me a rational reason why this is a problem (Score:3, Informative)
They gave their customers lower prices if they guaranteed not to buy their rival's chips. To my mind, that is unfair.
Justin.
Re:Give me a rational reason why this is a problem (Score:3, Insightful)
But, if you read the article, that is not what was happening.
Rather, the scheme was that if I was buying 1,000,000 intel chips, and you were buying 1,000,000 intel chips plus 500,000 AMD chips, my intel chips would be cheaper. Ie it is not an issue of bulk discounts, but rather of bribes not to buy anything from AMD.
Now,
Re:Give me a rational reason why this is a problem (Score:4, Insightful)
Of course, this wouldn't happen in Japan. Japanese keiretsu have pretty well divided up the Japanese business market satifactorily. Trying to skate a Japanese business away from an established vendor is considered socially deplorable. It's done, but very subtly, so it doesn't look like the computer company is establishing inroads in the competitor's market. In the US, their "cooperation" would be considered "collusion" and "price fixing".
Wanna read a cool book? "The Asian Mind Game" by Chin-Ning Chu explains a lot about the roots of Asian competitiveness and difference in ethical guidelines vis a vis The US and other occidental cultures. It will change the way you view Asian politics and business.
This attack on Intel may not even be aimed at Intel as much as laying the groundwork for an attack on Apple (which is actually doing OK against Sony in Japan) or the introduction of a Fujitsu replacement for the Intel chips a couple of years from now.
Parent
Like that but different (Score:5, Insightful)
Company A and Company B buy 500 intel processors.
Intel goes back to those companies and says "Hey, we'll pay you money^H^H^H^H a 'rebate' - if you promise not to buy any AMD chips for a while."
Company A says "ok" and gets the cash, Company B tells them to go to hell, and doesn't get squat.
But who reads TFA around here?
Parent
Re:Guess they just didn't know. (Score:3, Interesting)
More to the point, we don't live in a world where one usually sees the price depend on how few of the competitor's product you bought instead of how many you bought from them.
For what it's worth, there have been rare occasions when buying more of an item might lead to higher per unit prices.
One example involved Sony whe