Intel in Antitrust Trouble in Japan 203
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."
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".
Re:So carrots are legal, sticks are not (Score:2, Insightful)
Of course, Intel did not actually threaten to initiate force against their customers (theft, fraud, extortion, murder, rape, etc). If they had, there would be no debate over the ruling. Intel only "threatened" to stop engaging in voluntary trade with their customers! Can you not see the difference here? Or were you deliberately trying to present the case as an actual threat of force?
The fact is that Intel's customers
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.
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?
Re:So carrots are legal, sticks are not (Score:2)
That is correct. As a buyer, you are free to not patronize businesses owned by black people because they are black. As a seller, you are not free to refuse service to black people because they are black. These rules have been in place for years in the US.
Additionally, this isn't a "free association" issue, but is an antitrust issue. If you had the dominant product and refused to do business with anyone
Re:So carrots are legal, sticks are not (Score:2)
The zero-aggression principle ("No human being has the right -- under any circumstances -- to initiate force against another human being, nor to threaten or delegate its initiation") is both arbitrary and contrary to human nature. After all, thorough history, aggression has been the constant companion of mankind. Don't take my word for it - go and read a history book. You'll see that it reads as a s
Re:So carrots are legal, sticks are not (Score:2)
Re:So carrots are legal, sticks are not (Score:3, Insightful)
I try to avoid answering such questions, since any numbers I could come up would be pure guesses, and guesses aren't valid arguments. Nor do I think it's my place to speak for people I've never even heard of.
Re:So carrots are legal, sticks are not (Score:2)
And yet you see no aggression in raising prices against a portion of society sliced in any arbitrary manner? Do you define aggression by any sane standard or do you only count sticks and stones?
Re:So carrots are legal, sticks are not (Score:4, Insightful)
Film at 11. [maxbarry.com]
Re:So carrots are legal, sticks are not (Score:2)
Re:So carrots are legal, sticks are not (Score:2)
I would commend the grand-parent on how well he has been educated by the current regime as well--and by that I mean the corrupt two-party system.
Re:So carrots are legal, sticks are not (Score:2)
Re:So carrots are legal, sticks are not (Score:2)
Re:So carrots are legal, sticks are not (Score:2)
I also consider the argument against 20th century regime socialism is not true communism as well as that Marx did not formulate communism as
Re:So carrots are legal, sticks are not (Score:2)
Yeah, let's hear it for zero-agression! Woo, zero-agression!!!!1111one!
Re:So carrots are legal, sticks are not (Score:2)
Re:So carrots are legal, sticks are not (Score:2)
God, I'm so tired of this tactic. Replace the words all you want, man... That's fine. I'll play this game and I'll win. Allow me to rephrase.
Economic agression is still agression. How did they agress, you ask? Well, let's see. When they made people who, as consumers, chose to exercise their ability to make choices about what product to buy on it's merit as a product (which, last time I checked, is what responsible Capitalistic consumers are supposed to do), and, in th
Re:So carrots are legal, sticks are not (Score:3, Insightful)
Re:So carrots are legal, sticks are not (Score:2)
Just my $.02,
Ron
Re:So carrots are legal, sticks are not (Score:2)
Not even if one company has enough dominance to force yours out of business, by raising their prices to you, if you don't use them exclusively? There are some companies in some markets that have that kind of dominance.
What!? (Score:5, Funny)
Re:What!? (Score:2)
Sheesh - I don't even know why that even got reported - Linus got a computer for free and he's actually using linux on it!
Re:What!? (Score:2)
Hey Intel... (Score:3, Interesting)
See how you and Microsoft are on the same side of it?
That's a bad thing.
Re:Hey Intel... (Score:4, Insightful)
I always think of it like this: they're not immoral, they're amoral. They just don't care about right or wrong, they can't afford to, because that's how the system works. I'm glad that they got caught, and I think we need much more government constraints put in place and have them actively enforced to prevent things like this from happening.
Of course, for that to happen, I'd need to buy myself a politician or two... and I'm only a poor student... care to give me a donation anyone?
Standard PR response (Score:5, Insightful)
That's how PR hacks are taught to respond. When, for example, your CEO is stealing money, your PRish role is to go out and with a straight face say: "The core Value of our company is Honesty. We will introduce a Business Codex to emphasize our commitment."
Obligatory (Score:2, Funny)
It seems a bit harsh (Score:2, Insightful)
Woo! (Score:5, Funny)
Does this mean that we get to start referring to Intel as a "convicted monopolist" in every /. article about the company, just like we do for Micro$oft??
That's awesome!
Gee, how about... (Score:2)
Hmm. Maybe Slashot can run a contest to come up with something we can place in their name that is as annoying as the dollar sign in "Micro$oft". How about "Intel In$ide"? No, that is a slogan - er - $logan. Anyone else?
Re:Gee, how about... (Score:2)
Re:Woo! (Score:2)
Well, I'd at least wait until a conviction comes down
Oh, and they'd have to be told by the courts that while what they were doing was wrong, that they could keep on doing it.
Intel in Antitrust trouble... in Japan! (Score:3, Funny)
The meme works.
I See What's Happening Here (Score:2, Interesting)
Looks to me like this could be the opening salvo of a new trade war. I just hope it doesn't affect the price of ramen.
Re:I See What's Happening Here (Score:2)
Last sentence was edited out by slashdot editors (Score:5, Interesting)
Antitrust intel? (Score:2, Interesting)
IANAL, but I thought that to be in a antithrust situation, you had to be barring others from market, and also have a significant market share (i.e more than 80%)
In the case of Intel, the consumer has a real choice, in AMD for home pc's, and POWER or AMD for servers. So as long as there is a real choice, there is competition, and IMO, there is very hard competition between Intel and AMD. So I think it's strange that Japan focuses those over Microsoft or other monopoles that is less challenged.
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.
Re:What's missing the from Intel statement (Score:2)
The idea that there is no evidence in support of a religion depends very heavily on which religion you are referring to, and who you ask.
For example, if you were to ask Thomas Aquinas about Christianity, he would supply wads of pro-religion evidence, which you are free to accept or reject as you choose.
The fact that we can reject evidence (even if the basis for rejection is reasonable) doesn't mean that it doesn't exist.
Though you are correct in your statement that the exist
How do they know? (Score:2, Interesting)
Re:How do they know? (Score:2)
It would not suprise me in the least that Intel knows where AMD is at, and AMD knows where Intel is at. It just makes good business sense; if not only to try to grow into areas where your competitor does well.
The company I work for has a pretty decent research staff that investigates "competitors". You need to try to stay one step ahead of the game; being bli
Re:How do they know? (Score:2)
And I believe... (Score:2)
And I believe my actions are both fair and lawful... Now, to go rob that bank...
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)
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.
AMD just told Dell to take a flying leap (Score:3, Interesting)
U.S.-based AMD Not Seeking Orders From PC Seller Dell
Dow Jones Equity News, Thursday, March 10, 2005 at 00:17
TAIPEI (Dow Jones)--U.S.-based Advanced Micro Devices Inc. (AMD) has no plans to supply chips to Dell Inc. (DELL) in the foreseeable future, despite Dell's No.1 position in the global personal computer business."Our plans to successfully grow market share and improve our finances are actually based on not doing business with Dell. We're not going to give away product just t
Re:Dell and AMD (Score:2)
Michael Dell calls Intel and says, "You know, we're sorta considering AMD... again. How much of a discount do you give us not to?"
Big customers do that kind of thing all the time.
_And_ witness the recurring joke of Dell dropping hints, or outright shooting its mouth off, that it considers using AMD for a change. No, really. This time they mean it.
At one point they even went as far as to let you order a replacement Athlon on their site, in case you ha
cmp [Intel+AMD],[Microsoft+Linux] (Score:2, Interesting)
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...
Sick minds running corporations (Score:2, Insightful)
After doing what Intel did, I can't believe someone would say this with a straight face. What a world we live in.
Replace REBATE with BRIBE (Score:3, Insightful)
Companies set their real prices based on the manufacturing cost of the product and the profit they must make on each to stay in business. Their sell price is NOT supposed to be based on whether the the buyer is also obtaining products from a competitor. Giving rebates or discounts based no that principle is similar to a bribe, and is illegal nearly everywhere [unless you are receiving the bribe ;) ].
Counter Justice (Score:3, Interesting)
Intel policy vs bad-salesman? (Score:2)
[Intel to cop]: "Oh no, we would never do that." Case closed.
This time some [brave?] Japanese company probably complained to MITI and produced documents that showed their discountwas dependant on %Intel, not just volume Intel.
Japanese law may permit the whistleblower to remain anonymous. US law probably wouldn't. I doubt even Dell could risk Intel's retaliation.
Has Intel has gone to the Dark Side? or is this an isolated bad-saleman case?
Price of INTEL vs AMD or others (Score:2)
Monopoly works... (Score:2)
They did this here in the US, too. (Score:2)
Oh! I'm sorry... (Score:2)
I thought they said "...air and awful."
It's an old saw (Score:2)
Yep Every criminal in the pen is innocent, Standard Oil was justfied giving away gasoline in new markets and raising the price in old ones to offset the cost. Dalmer claimed that his victims "asked for it"
That's the problem with ego's. In the hands of those without morals and ethics they leave you thinking you are right because you appear to have succeeded. What Intel doesn't understand is, th
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!!
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.
Re:Give me a rational reason why this is a problem (Score:3, Informative)
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.
Close but no. Intel shouldnt charge Company A the same as Company B for the same 50,000 units. Intel *should* charge Company A the same for those 50,000 units as they would if they didnt know about the 50,000 AMD units. Bit of a difference.
Intel is well within its rights to charge Co
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...
You mean like what Apple is doing (Score:2)
Apple refuses to license their fairplay system, using their dominance in the music download business to leverage sales for iPods, the only player that can play these songs without jumping through a bunch of hoops.
Apple refuses to support WMA on iPods, combined with their refusal to license fairplay, allows them t
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:2)
Re:Give me a rational reason why this is a problem (Score:2)
They gave their customers lower prices if they guaranteed not to buy their rival's chips. To my mind, that is unfair.
Well, maybe it's not very "nice". But I still don't understand what objective grounds can be given for making it illegal or considering it immoral. They're Intel's chips, they made them - why can't they charge whatever the hell they want, to whomever the hell they want? You don't have to buy them. If you don't like Intel's practices, let them know - by supporting the competition inste
Re:Give me a rational reason why this is a problem (Score:2)
What I think you are not considering is that in, as far as I am aware, every country the notion of forming a company is a privilege. It is contingent on behaving in a way that is not detrimental to the consumer at large.
Otherwise, why would we even have audits?! What is objectively reasonable about forcing people to declare their accounts? Why not just make them declare their profits as that is the basis of tax (and what hap
Re:Give me a rational reason why this is a problem (Score:2)
What I think you are not considering is that in, as far as I am aware, every country the notion of forming a company is a privilege. It is contingent on behaving in a way that is not detrimental to the consumer at large.
I agree that forming a corporation is a privilege granted (rightly or wrongly) by government. But forming a company, i.e. a group of people who work together for a common goal (which could be making CPUs, or putting on a theatre presentation, or whatever) is (at least in the United Stat
Re:Give me a rational reason why this is a problem (Score:2)
Taking your second example to the extreme, would it be an issue if the dealer was an individual, offering lower prices if the customer doesn't buy from another individual? I don't know.
J.
Re:Give me a rational reason why this is a problem (Score:2)
I think we have a difference in terminology only, here. In the UK, a company is afforded certain legal rights and privileges (limited liability, reduced tax) as it is intended to foster co-operative productivity and thus eventually employment. Perhaps that maps better to corporation?
I think so. In the US, a company can be just any ol' business, whether legally incorporated or not. I don't think the term has legal significance. A corporation, however, is chartered by the government, afforded liability
Re:Give me a rational reason why this is a problem (Score:2)
J.
Re:Give me a rational reason why this is a problem (Score:2, Informative)
Okay, I'll try explaining this in easier terms.
Intel to customer: "If you buy 1 of these, it will cost you 100$, if you buy 10, you will get them for 50$ each".
So far, it's fair enough.
Intel to customer: "However, for each product you buy from AMD we will lower our discount. Buy one single item, and our product will cost you 60$, even if you buy 10 of them."
Now, this is unfair, since the customer w
Re:Give me a rational reason why this is a problem (Score:2)
Bulls**t (Score:2, Insightful)
Monopolies are bad, irregardless of whether they are owned by the state or privately. People living under communism had no choice, too. All they had was one-two products from one state-owned monopoly.
BTW, I assume that people are able to distinguish between cheese and CPUs on their own.
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:2)
Um, where did you learn that? In the absence of market regulation, but where there are still barriers to entry like investments, economics of scale or network effects (note: you only need one of the above), there are many markets that are natural monopolies. They also tend to make huge profits (though less than full monopoly profits, since you normally
Re:Give me a rational reason why this is a problem (Score:3, Insightful)
No, that's the point, market power costs money to excercise (eg Intel has to pay people not to buy AMD, or keep it's prices below reasonable cost plu margin or whatever), so given a perfectly stable open market etc. etc. eventually the little guys who keep nipping at the monopolist's ankles will bring it down.
Unfortunatly, in the real world, there are barriers to entry, especially international ones and the world c
Re:Give me a rational reason why this is a problem (Score:2, Informative)
Volume discounts are fine. The problem occurs not when you say "Buy more than 5,000 of my widgets and you get a discount. Buy less and you don't." The problem is when you say "If the number of my widgets in your shop drops below %80 of your total I will cancel the discount." Attempt
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.
Re:Give me a rational reason why this is a problem (Score:2)
You buy 1 Intel for $10
I buy 1 Intel for $15. Why? Because I also bought an AMD.
If I bought 10 Intel for $10 and you got 1 Intel for $15, that's more understandable, and fair. THe issue is that Intel gives a discount _if_ you do not use a competitors chips, not based on volume.
There's nothing wrong with volume discounts or possibly even discounts to preferred customers (say those who pay on time or something).
This is pretty mu
Re:Give me a rational reason why this is a problem (Score:2)
Re:Give me a rational reason why this is a problem (Score:2)
J.
Re:Give me a rational reason why this is a problem (Score:2)
Re:Give me a rational reason why this is a problem (Score:2)
J.
Re:Give me a rational reason why this is a problem (Score:2)
There are numerous sites that report Microsoft donations were even more lopsided: they gave at the rate of 58/42 to Democrates. Where's the big stink being made by the "right wing"?
What is Microsoft extorting from the Democrats, hmm? Why aren't you complaining about that as well?
All politicians accep
Re:Give me a rational reason why this is a problem (Score:2)
I can't say what the parent truly meant, just what it looked like to me.
At any rate you're right. Neither party is guilt free, we've seen it with all kinds of policians regardless of party. It is the reason we need to restrict funding, convincing our representatives of that is exceedingly more difficult. Definitely isn't right but as long as people keep electing someone like Bush it will continue; in the U.S. at
Re:Give me a rational reason why this is a problem (Score:2)
That may well be the case. Now, if it's not too much trouble, go back and read my post. I wasn't talking about "computer companies", I was talking about Microsoft specifically, in response to a comment about Microsoft's OEM's. Were you not able to follow the thread or are you trying to change the subject?
"Does that indicate a new conspiracy on the left wing that we should be worried about?"
If you think that t
Re:Give me a rational reason why this is a problem (Score:2)
Re:Give me a rational reason why this is a problem (Score:2)
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?
Re:Like that but different (Score:2)
This would be very good for the environment, and for programming!!!
Prices on new Intel CPUs would skyrocket, so prices on new PC's would skyrocket.
Fewer computers would be sold and push old ones to landfills. This would mean that the old 386's you've been using as bookcase supports would start being worth more.
This would also mean that processing power would not increase as q
Re:Guess they just didn't know. (Score:2)
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
Re:Guess they just didn't know. (Score:2)
Yes, discounts for quantity happen, and are legal ... but what if the owners of Catalog "A" charged you more for your 100 widgets than they charged me for the 100 I bought, just because you also bought widgets from Catalog "B". That is not only unfair pricing, it is an attack on "B".
Japan has no problem with the
Re:In the same vein, (Score:2)
Re:exclusive rights? (Score:2)
With fast food it often goes deeper than that though. For exapmple: The same parent company owns Pepsi, Taco Bell, Pizza Hut, and KFC. Unsurpisingly, the latter three sell softdrinks made by the first.
Re:exclusive rights? (Score:2)