Experts say Intel has been instrumental in driving down PC prices, one of the key indicators of competition and one charge New York's Attorney General cannot easily level against Intel in its antitrust lawsuit.
New York Attorney General Andrew M. Cuomo on Wednesday filed a federal lawsuit against Intel accusing it of paying computer makers rebates to illegally maintain its monopoly power and preventing AMD from gaining business with PC makers.
One of the operative charges in the complaint centers on prices. "Intel launched an illegal campaign to deprive AMD of distribution channels and consumers of product choice and lower prices," the complaint alleges.
Not so fast, say some experts. "Prices are falling, buyers are not complaining about Intel's loyalty discounts, and the lower prices produce obvious and immediate benefit for consumers," said Joshua D. Wright, professor at George Mason University School of Law, and a scholar in residence at the Federal Trade Commission until 2008.
"Given the intuitive and easy to grasp nature of the consumer benefits of discounting contracts in the Intel case, I suspect that judges will be less likely to condemn these practices without real proof of actual consumer harm. I'm skeptical that AMD, (New York), or the (Federal Trade Commission) will be able to produce that here," Wright said.
And prices continue to fall. One of the most recent examples of steep downward PC price pressure is ... Read more
Nvidia CEO Jen-Hsun Huang seemed unsurprised by allegations made Wednesday by New York's attorney general that Intel has illegally tried to maintain its monopoly.
Nvidia CEO Jen-Hsun Huang.
(Credit: Nvidia)"Where there's smoke there's probably fire. It blows my mind that's it's taken this long," Huang said in an interview Thursday, just after the graphics chipmaker posted solid fourth-quarter earnings. Nvidia competes with Intel in the PC graphics chip market.
"Even bribes and kickbacks can't stop somebody from buying our graphics processors," he said, referring to the allegations made in the lawsuit.
When contacted, Intel had no comment.
"Tactics good for AMD are tactics good for Nvidia," he added. "We have far superior products to Intel, that's how we survive by innovating far ahead of (Intel)."
Nvidia is locked in a legal battle with Intel, preventing Nvidia from making chipsets for Intel's "Nehalem" Core i series of chips--the lastest and greatest line of processors from Intel. Nvidia's Ion chipset--used in Apple MacBooks and Hewlett-Packard Netbooks, for example--has been very successful.
Huang also commented on the wave of next-generation tablets and media pads expected to hit the market next year, such as the rumored Apple tablet. Nvidia is already working with device makers who will use its Tegra chip in these designs next year.
"I think that's going to be the next big form factor," he said. "More and more people that use the iPhone would like to have a bigger iPhone. And the fact that 4g is coming--20 megabits per second. What can't you do. I think this (market) space is about to go nuts," he said.
"I really think we're on the cusp of our second personal computer revolution," he said.
An antitrust lawsuit filed Wednesday by the New York attorney general alleges a longstanding symbiotic relationship between Intel and Dell.
New York Attorney General Andrew M. Cuomo filed the federal lawsuit against Intel accusing it of paying computer makers rebates to illegally maintain its monopoly power and preventing AMD from gaining business with PC makers.
In a similar case earlier this year, the European Commission fined Intel $1.45 billion, alleging illegal rebates to PC makers such as Dell and Hewlett-Packard. AMD also made analogous allegations in its case filed against Intel in June 2005 that is slated to come to trial in March 2010.
And this may not be the last major case filed against Intel that makes these allegations. The Federal Trade Commission is also expected bring charges against Intel, according to reports.
"It is the AMD case filed 4.5 years ago. It's the same case the EU brought. There's nothing significant or new here that hasn't been discovered," Intel spokesperson Chuck Mulloy said about Wednesday's complaint filed by the New York Attorney General. "Neither consumers--who have consistently benefited from lower prices and increased innovation--nor justice are being served by the decision to file this case now," Mulloy said.
Doling to Dell
The complaint singles out Dell as a large recipient of Intel's "largesse," echoing the 2005 AMD lawsuit. Quoting often graphic exchanges between Intel and Dell executives, the suit alleges that Intel gave Dell massive rebates totaling in the billions of dollars over a period of, at least, several years. Hewlett-Packard and IBM, among others, are also cited in the complaint, but Dell is the focus of some of the most egregious Intel behavior, as alleged by the attorney general.
"We use both Intel and AMD chips and we do provide customer choice," Dell spokesman David Frink said Wednesday. Dell used Intel processors exclusively until May of 2006, when it adopted AMD chips for the first time.
"In pure dollar terms, Dell was far and away the leader in receiving Intel's ... Read more
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