Print 62 comment(s) - last by JackPack.. on Mar 2 at 2:02 PM

Skype's decision to release Intel-only features on its newest software refresh may have been a poor idea

Last month we wrote a small piece about the upcoming Skype 2.0 features that are only enabled for Intel processors.  AMD is hoping to add another spear to its ranks by demanding Skype documents that prove or disprove Intel provided incentives to Skype for this favor.  Intel denies the allegations

A Skype executive declined to comment earlier this month when asked whether the company had tested the performance of its software on both Intel's and AMD's dual-core chips. An Intel representative confirmed that there are no instructions that specifically enhance the performance of voice over Internet Protocol (VoIP) software like Skype's in Intel's dual-core chips.

This is not the first time this year for an AMD-Intel legal battle.  AMD has been building anti-trust cases against Intel in Japan, the US and Korea for over a year, claiming that Intel leverages its buyers and distributors to not carry AMD products.  Of course, AMD's 21.4% marketshare is looking pretty good to the company right now, monopoly or not. 

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RE: gg
By Viditor on 3/1/2006 10:06:01 AM , Rating: 2
seeing as intel doesn't actualy have a monopoly

Actually they do...
It's a common misconception that "monopoly" (at least as it applies to anti-trust laws) means owning 100% of the doesn't. In fact, the US government says that any company which has greater than 50% marketshare might be a monopoly, it all depends on the company's ability to construct "barriers to entry" by using their market position.

RE: gg
By JackPack on 3/1/2006 1:48:06 PM , Rating: 2
Legally, they've never been shown to be a monopolist.

RE: gg
By Questar on 3/1/2006 4:32:12 PM , Rating: 2
Wrong again dude.

Creating barriers to entry has nothing do to with being a monopoly. In that case I should sue both AMD and Intel becuase they have made the barriers for me to enter the x86 cpu market too high.

Monopolies are perfectly legal in the U.S. Using monopoly power to prevent another company from entering a market is illegal in the U.S.

RE: gg
By Lifted on 3/1/2006 8:47:08 PM , Rating: 2
Dude, he said

"barriers to entry" by using their market position .

Not "barriers to entry" becuase it's too expensive for you to build a fab.

RE: gg
By Viditor on 3/2/2006 1:50:11 AM , Rating: 2
Creating barriers to entry has nothing do to with being a monopoly. In that case I should sue both AMD and Intel becuase they have made the barriers for me to enter the x86 cpu market too high

As Lifted points out, you are getting confused on terms...
The barrier of cost on a Fab is called (in legal terms) a "Natural Barrier to Entry", and it's not illegal as it's caused by the nature of the market and not a creation of the monopolist. Being a monopoly in and of itself is not illegal, but the rules of business practise are certainly different. For example, if AMD and Intel had equal marketshare, then none of AMD's accusations would be actionable. What's illegal is using your market dominance to keep smaller companies from competing equally.
Intel never paid Skype - all they offered was engineering support to enhance the software for multithreading. In turn, they get exclusivity for a period. This is not much different from a patent. That's why it's not illegal

There are several things wrong with this statement...
1. As anyone who has used a barter system can tell you, cash is not the only form payment there is. The value of engineering optimisations, writing code, testing the new chip design, etc... probably runs into the 10's of Million$.
2. Keep in mind that Skype is unchallenged in it's field. Unlike Vonage and the others, Skype is available internationally and their marketshare is many times larger than their nearest competitor. As it was Intel who initiated the deal (according to Intel's own spokesman), by paying Skype with Millions of $ in services to keep AMD out, they have broken the law rather transparently...frankly it was the stupidest move I have seen Intel make since the MTH disaster.
3. This is absolutely nothing like a patent...a patent is the creation of an idea or concept which may be licensed by anyone who pays. This is the purposeful restriction of a competitors product.
Legally, they've never been shown to be a monopolist

True...but of course the only reason for this is that the suit isn't in court yet. However, by any legal definition they certainly are. Intel's defense appears to be that the x86 CPU isn't a market, and that the court must judge any monopoly based on all semiconductors (memory, graphics, etc...). Because of the Microsoft precedents, this is almost certainly guaranteed to fail (during the MS trial, the court determined that x86 WAS a seperate market).
Intel can get away with saying that Skye is optimized to run on intel processors, it can't pay Skye to make them not run on AMD processors

Intel is the one who created those optimisations for Skype...that is both the payment and the illegal act...

"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson

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