Intel’s $1.25 Billion Settlement

Intel may have reached a deal with Advanced Micro Devices, but that does little for consumers hurt by anticompetitive practices.

Comments: 34

  1. All evidences prove US is no longer based on entrepreneurial free market, which has created the miracle it once was. Crony capitalism destroys US.

  2. Another anti business, anti creativity, anti jobs, rant by the Times. On one hand the Times complains that no one is hiring, on the other it trashes one of the most vibrant technology companies ever created. When the Times cheers billion dollar fines and encourages more fascist policies over business, more companies will seek friendlier environments in which to operate and be creative.

  3. You want to lose a successful manufacturer, you will. Let's stop fretting. You want innovation, you want cheap tool of innovation, cheap but good - let market to decide. China will take care about Intel sooner that courts. EU needs employment, it will go after any successful American. Do not make Intel to spend money on lawyers. Ask Intel to do more innovative products and let competitors to struggle for your money. Hands off Intel!

  4. Intel's net income in the third quarter 2009 has been 1.9 billion dollars! And it's brutal and in many cases illegal business practices have been going on for years. And still, the fines for that activity are "just" $1.25 billion and $1.45billion? The company "earns" that money in less than 5 months! So, will the penalties leave a lasting impression on the chipmaker who has almost a monopoly on PC CPUs? Probably NOT.

  5. I really cannot see where AMD, a company that has consistently underperformed, shipped defective products, cancelled or postponed new product introductions and made promises it has consistently failed to fulfill can be hurt by another company. They have been a second rate company in virtually every department because they have failed as a company, not because someone else hurt them. If someone is to blame, it is the crying, whining, complaining "leadership" of AMD, and no one else. The only reason AMD still exists is because Intel has handed it the technology it failed to develop on its own, simply to allow a second source to exist and maintain some semblance of a competitive atmosphere and avoid exactly what is happening now. A bunch of crybabies worrying about the value of their worthless AMD stock they are now stuck with and trying to find someone to blame.

    Put the blame where it belongs.

  6. With our legislators in the back pocket of such corporate pirates anything leveled against them will just be bought off for a measely million or so dollars. Without changes in accounting and pricing rules consumers will continue to have to subsidize this "cost of doing business" since it is just passed on to the consumer.

  7. In its history, Intel has been furiously innovative, pushing the limits of semiconductor physics at a predictable cadence unsurpassed in other industries. This innovation has directly resulted in tremendous cost reductions in PCs, laptops etc over the years. Failure to even mention this in your editorial distorts the real facts. This is disappointing to me - a trusting New York Times junkie for 18 years.

  8. The basis of your argument supporting continued antitrust action against Intel has no support in the world of electronics and computers. To imply that Intel uses its market power to keep prices high and, thus, disservice consumers is laughable and disproved by 30 years of staggering product improvement accompanied by an amazing ever lowering of cost. No other industry (think - automobiles, education, health care) even remotely compares with the computer industry in this regard.

    This happens because globalization thoroughly permeates this business and competition is ferocious. Informally, Intel has adopted as its motto - Only The Paranoid Survive. This attitude has led Intel to invest billions each year to drive down cost while improving product performance. Over the years that Intel has survived and thrived to the proven benefit of its consumers, dozens of very large electronics and computers companies have failed or faltered (think - Sun Microsystems, Compaq, Digital Equipment).

    The problem with the EU's war on Intel is that they have equated market dominance with anti-consumerist activity. Yet, year after year, the real world evidence contradicts that assertion. Any computer technologist could educate the Times that there exists, even today, many other processors that computer manufacturers could use, and in specialized situations (think - cellphones, super computers) they do. However for the general world Intel leads because of the value it provides. Even mighty Apple now uses Intel's chips.

    As with Coumo's actions, the EU pressures Intel on the evidence of flimsy salesman braggadocio. The Times' assertion are equally flippant, unsupported by any of its own investigation, and just plain ignorant sounding.

    Before sounding off on Intel, the Times should do some homework and learn and provide the truth about the reasons for Intel's success.

  9. The sheer defiance of facts in this editorial is amazing. The consumer is the loser because of Intel? Really? In the last 25 years, computer microprocessors (of which Intel is the LARGEST manufacturer) have become orders of magnitude faster and prices have crashed through the floor. A regular dual processor laptop today has over thousand fold compute capacity of computers that were used in World War 2 and later for a variety of uses. And it costs around $600-$800. Exactly how and where is the consumer hurt here?

    If the Times editors want to cheer lead the power-hungry and self-serving public figures like Neelie Kroes and Mr. Cuomo, please resign from a newspaper board and reveal yourself for what you really are: apologizers of the liberal status quo. Consumers would be better off with enemies from the communist party than friends like you.

  10. Some deeper reporting on the reasons why the EU commissioner Neely Kroes punished Intel, and Microsoft and Oracle would be useful. Free markets do not always work. Large companies do not play on level playing fields, they distort competition by making use of their large cash reserves. Winning through innovation is indeed good, being able to hire the best employees is good, but paying off the marketing forces is not good and that is what the EU tries to correct.

  11. Why is this even an issue? There is no competition in any business segment today. All the big companies have eaten all the small companies even as the far right talks about how small business is the backbone of America. Like WalMart, of course. How stupid of me. The stats on all the small businesses that close when they build a WalMart on a historic battlefield in your town are legendary, but let's promote small businesses anyway. Who cares about statistics? Whadda mean there aren't any? McDonalds is small, isn't it? Those stores aren't very big when you compare them to, say, Home Depot. What's wrong with you people? Trickle down and supply side work, even though everyone SAYS they don't. Whadda they know? Is that my helicoptor to the Hamptons? Sorry, gotta run.

  12. This editorial is spot on!

    As evidenced by the constant rise in chip prices and the failure of Intel to provide more powerful....

    Oh! Never mind.

  13. Mr. Coumo, just as the EU, sees Intel as a source of easily-plucked funds, just because Intel is successful and some competitors complain. Let the competitors complain to the court system and provide their evidence in court, rather than have the state do their work for them.

  14. LIke Cuomo's case, this editorial reflects work that is lazy and unwilling to dig up true substantive data. Out of millions of emails culled from Intel and others (literally), Cuomo produces a dozen or so that read like a soap opera but do not demonstrate any illegal action by Intel.

    While the country was in a tailspin a year ago, Intel announced a 4 billion dollar investment program in manufacturing plants in the United States. Intel's recent chip designs break all benchmarks, maintaining the pace of innovation, far exceeding AMD's product capabilities. Intel's manufacturing technology has been maintaining Moore's Law for longer then anyone would have expected ten years back. Intel has been investing billions a year in manufacturing and development to keep an insane pace of development going forward. Intel's high volume manufacturing technology is arguably world leading not just beating out AMD, but others such as Samsung, NEC, and Texas Instruments.

    All this has provided massive increases in computing power as CPU average selling prices have come down.

    Really, so now the editorial and Cuomo feels it helps America by going after Intel? Is this the big fish to fry? Is this the source of our problems?

  15. I have to agree with most of the folks posting so far. There is a world of difference between anti-trust and simply being better. Is AMD been driven out of business. I just bought one of their processors two weeks ago. Any problems they have come from within. Yes Intel is aggressive but their aggresiveness has benefited consumers. The EU's reponse is predictable and we really need to understand what is going on there. The EU consistently uses its power to restrict successful American companies. We had better wake up to that fact and begin fighting back along the same lines. Free trade has become to mean no barriers for all other countries to export while we have many barriers that are tariffs in all but name. It is time we understand that all the NAFTA and WTO have served to reduce American prosperity.

  16. This Times editorial is exactly on point here. Intel should be forced to end its now acknowledged anti-competitive behavior. AMD typically offers a comparable CPU at a substantial discount to a comparative Intel product. I only use AMD processors in the enthusiast machines that I build for myself or friends. Only Intel's attempt at collusion can explain AMD's shockingly unequal share of the commercial PC market.

  17. This editorial is right on the mark. Antitrust laws are important in part because they prevent behemoths from impeding innovation. The breakups of AT&T's hold on the telecommunications industry and of IBM's hold on the computer industry created surges of innovation and growth among smaller companies which benefitted consumers with more choices and lower costs in both areas.

    Leo Toribio
    Pittsburgh, PA

  18. Wow. Can't say I'm knowledgable about the subject, but so many posts furiously pro-Intel makes me wonder if the writer is totally off-base for reporting about this court case, or if there's a concerted effort by Intel employees to spin this. Truly don't know.

  19. Intel products are just better.

  20. Surprisingly people who have decided to chide NYT for publishing this editorial seems to me have not read it in the first place, at least properly. They are just bunch of liberal-bashing, flag waiving "folksy" people, aren’t they?

    Intel's manipulative tactics are well documented, not something fabricated by NYT or others such as EU Trade Commission, which is an excellent regulator.

    As far as stifling US innovation is concern the very dubious tactics that have been mentioned are exactly doing that. For a healthy market environment there should be multiple competing entities, not a single behemoth that "can not fail" (remember the banks?).

    And as far as jobs are concern feel free the see package where the Intel products are made, OK?

  21. If the consumer has been hit so hard, then why have PC prices been dropping for years at the same time performance has gone up? Intel is successful because they create tremendous value for their customers. This is just more business bashing in a part of the economy that is actually showing strength.

    Politicians seem to hate success in this country, unless there is a fat campaign contribution behind it.

  22. When the 2nd sentence of the op-ed states that Intel has been driving up chip prices, when all evidence shows that chip prices have fallen drastically, you've automatically discredited yourself.

  23. I don't understand why Intel should be exonerated if they really have been doing this conditioned sells and threats ...I dont like AMD very much but we'll never if they could have been better and there could be better prices for our pc's if intel continues to work this way( if really does)

  24. Right on, NYT. Commentators praising Intel's creativity miss the point and seem to either be ignorant of the technology details or have short memory.

    Indeed, there has been tremendous progress in CPU design over the years; however, that progress was as much due to competition as it was to Intel's intrinsic benevolence or ingenuity. In fact, most of the features of top-of-the-line Intel CPUs - multi-core, x64 architecture, embedded memory controllers - were first introduced by AMD in their server chips, which in turn forced Intel to play catch up. A few years back, AMD server chips were superior to Intel's in terms of performance and had a good market share. Now this technology has tricked-down to the consumer market, and we are all better off as a result.

    But - business practices as outlined in the article could effectively drive AMD out of business and end this innovation-producing competition. Left unchecked, Intel will slow down its development and produce more duds like the IA64 architecture and the Itanium processor, and there will be no one to straighten things out. The cost-of-entry into the CPU business is so high that a new serious competitor is unlikely to arise unless Intel messes up really badly; until then, we'd be stuck with mediocrity. To all the doomsayers - think of innovation in telecom industry before and after the break-up of AT&T.

    One more point. CPUs are inside a great deal of modern defense/intelligence technology. Having a single CPU manufacturer exposes the country to an undue strategic risk. Just like we have competing companies building our military jets, we need competing companies putting the brains in all that hardware.

  25. I don't know whether Intel is guilty of anything or not, but this whole article talks about the rebates given from Intel, which lower prices, then complains about high prices as a result. What?! Not exactly an intelligent article. If Intel has to lower prices and offer rebates to compete with AMD, consumer's are benefiting. That's economics 101.

  26. Oh no you don't.

    The people who are hurt by monopolies are every single american in this country. The purpose of Anti-trust lawsuits is to avoid three negative side effects of the free market.

    1) Price fixing. monopolies have the ability to control price and so they constrain supply in order to raise price, or merely charge a price where the difference between marginal revenue and marginal cost is highest.

    2) barriers to entry. monopolies create barriers to entry for both same product competitors as well as innovators, who would eventually replace said product with something new and better.

    3) labor force reduction. Monopolies lower the overall employment and create a case of price fixing in labor since they become, in many cases the sole employer in those markets.

    If you want to know who wins with anti-trust cases, it is the people of the USA. Our pocket books, our jobs, our future.

  27. To Maxim - Electrical Engineer:
    very good post indeed, sir

  28. Intel is not guilty of anything. I have been inside the computer industry for years. They simply beat AMD on technology. They innovate and bring the better technology into the industry. Companies feature Intel processors because they are consistently better and offer better support. Intel has developed the Atom processor which has created the Netbook market. That is innovation. Where is AMD? Crying foul in court. Compete in the market and that will prove your worth.

  29. Why pick on Intel, which at least is bringing us great products, while you say nothing about the banking and finance cartels which exert monopoly/oligopoly power over the financial system while producing junk products? Where is your call for anti-trust action against them? Too big to fail, ergo too big to exist. Break 'em up and restore competition.

  30. This is probably third or fourth ranting editorial I have seen on Intel bashing. This country forgets that despite rising costs Intel has chosen to keep most of it's fabrication units in United States and employs over 50K people in US. People don't get how tough it is to run a semiconductor company and profitably for last 40yrs. Lets not forget Intel is responsible for rock bottom Microprocessor prices and single handedly made computers cheap by innovating and reducing cost. Cumuo's suit is self serving and now with AMD out of picture he will end up footing full bil for the trial and and drain NY state coffers. Shame on you NYT for acting like crony newspaper without considering all the facts.

  31. The United States has to focus on both competing with an ascending China and its growing industrial prowess while putting people back to real work, not make believe or fuzzy numbers work, but real nuts and bolts work. Because if the Obama administration doesn’t, and the unemployment rate remains above 10%, the democrats will get demolished in 2010 and even worse in 2012.
    Putting people to work means putting people back in factories, into the ditches, onto the tracks, on top of the roofs and laying down pipelines and stringing high tension wires. America will prosper with digging stuff out of the ground, erecting infrastructure, manufacturing products, and hauling freight. National wealth is created by value added activity. Education and Healthcare and Unions are expenses! Worry about them later, once we have built up our economy again. Don’t have some delusion that the next 5 years is going to cater to couch potatoes and pencil pushers. Industrial R and D and making things is the ONLY way to put millions back to work. Consumers will benefit by HAVING A JOB!
    Coal or natural gas power plants are needed to generate the electricity to run the factories and fire the economy. If we want new types of energy efficient cars assembled in the USA, saving America’s rescued auto companies, it is going to take cheap energy to fuel the assembly lines and run the vehicles.
    All this hub bub about climate warming; OK, Some sequestering technologies will be deployed, but if it comes at too high a cost and if it slows job growth, it will be tossed aside.
    If we want to repave the roads, repair the bridges, update and upgrade schools and hospitals, build rail lines,(all part of the Obama stimulus plan), we are going to pump up concrete, steel, tar, and brick manufacturing. Be prepared to reeve up that heavy equipment. Pollutants are going to be belched out on an unprecedented scale.
    Paraphrasing Admiral Faragut “Damn the CO2, the Unions and Lawyers, Full Steam Ahead”

  32. All I can add is that working on a semiconductor manufacturing plant project, I have had occasion to work closely with Intel's people and tour their facilities several times and learn about their very sophisticated "grass roots" public relations work with affected local citizens and communities.

    I've also seen the AMD (GlobalFoundaries) people in connection with developing the site I was involved in permitting, and by comparison, they are clueless and tone-deaf. Their approach is the conventional kissing up to power. Instead of lauding the community and local leaders who permitted the plant, at their recent groundbreaking, the object of fawning was Governor Patterson, a previous opponent of the project while in the State Senate (as thanks for the $1 BLN "incentive" grants from the State). A bunch of suits and their middle east partners from Dubai, gave him a tacky oil portrait. The whole thing was out of the Court of Versailles.

  33. It's too bad that the Intel chips are not good enough to sell in large quantities without rebates and marketing subsidies. Sort of like the American automakers who can't sell cars unless they are heavily discounted.

  34. Agree with gdv in portland, very disappointed in the NYT with this knee-jerk editorial. look beneath the surface on this one, there has been plenty of competition world wide. Intel is on top because it has always been in front and made the best products and the best business decisions. This settlement whould help clear the air of all the baseless assumptions.