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The FTC announced Friday that it will formally examine whether Intel abused its dominant position

Somewhere at the headquarters of AMD, there must have been a cheer that went up on Friday.  After months of losing ground to Intel, employee layoffs, and under the shadow of Intel's looming Nehalem architecture, the company finally had some good news to be happy about.

It’s no small mystery that AMD these days simply seems incapable of outcompeting Intel.  Intel argues that this is due to its superior products.  AMD, however, has long maintained that Intel was deploying anticompetitive processes, which it says are digging it into a hole from which it cannot escape.  However, despite a passionate ad campaign and lengthy discussions with antitrust officials in the U.S., AMD has seemingly had a tough time selling its idea that Intel was cheating in the microprocessor war.

The U.S. Federal Trade Commission (FTC), which supervises free trade in the U.S., announced that it was launching a formal antitrust investigation against Intel.  The stakes are high for both Intel and AMD; the total market for microprocessors racked up $225 billion in sales last year. 

Both Intel and AMD realize what’s at stake and have spent tens of millions in legal expenses and on public relations campaigns.  AMD had previous success in Europe, Korea, and Japan -- all of which have investigated Intel or threatened it with possible fines.  However, the biggest victory -- a U.S. antitrust investigation -- seemed out of reach until this week.

State authorities and federal appointees from the Bush administration have been taking a more lenient approach to antitrust that their European counterparts.  However, the major decision Friday marked a sharp new shift in policy. 

The new investigation originated with the new blood -- William E. Kovacic, the new chairman of the trade commission.  With the backing of his fellow commissioners, he reversed the decision of Deborah P. Majoras, the previous chair, who had been blocking the investigation for months to the frustration of those on Capitol Hill.  Majoras was a more lenient appointee, and helped work out the antitrust settlement in 2001 with Microsoft.

It will take months before formal charges against Intel might be made, so the upcoming administration’s stance will greatly factor into the case.  AMD is relying on the federal case as only one state -- New York, at the behest of attorney general Andrew M. Cuomo -- has agreed to investigate Intel on a state level.  California attorney general Jerry Brown denied AMD's pleas, derisively commenting that he was "not barking at every truck that comes down the street."

D. Bruce Sewell, Intel’s senior vice president and general counsel, says that the U.S. antitrust laws are different than European ones, and it will not be charged.  Intel is planning on racking up its Capitol Hill efforts, though, likely in the form of lobbyist dollars.

The first signs of the upcoming bad news for Intel appeared when chip manufacturers began to get subpoenaed by the FTC.  The FTC is working with Europe and other foreign governments to obtain evidence to use against Intel in a possible case.  Mr. Sewell said that he was working amiably with the FTC on a less formal review since 2006 and that Intel would remain cooperative.

AMD's top executives expressed their pleasure over the Commission's decision.  Tom McCoy, executive vice president for legal affairs at AMD, stated, "Intel must now answer to the Federal Trade Commission, which is the appropriate way to determine the impact of Intel practices on U.S. consumers and technology businesses.  In every country around the world where Intel’s business practices have been investigated, including the decision by South Korea this week, antitrust regulators have taken action."

The largest U.S. antitrust investigation since the Microsoft one of the 90s came the same week as more good news for AMD; Korean officials slammed Intel with a $25 million fine for violating its fair trade laws.  The Korean officials discovered that Intel illegally paid Samsung Electronics and the Trigem Company $37 million in payments between 2002 and 2005 to not buy AMD processors.  The European Union's European Commission (EC), which charged Intel with "the aim of excluding its main rival from the market" is expected to expand its charges this year.

Intel currently owns somewhere between 80 to 90 percent of the worldwide microprocessor market.  Many U.S. citizens do not realize that U.S. laws do allow monopolies, unlike elsewhere, but forbid companies with a monopoly from using its dominance to restrict competition.

With mounting evidence worldwide, Intel faces a tough case before the FTC.  However, it will likely do what it takes, or perhaps more aptly write the lobbyist checks needed to prevent it from becoming the next Microsoft.  Meanwhile, AMD will also likely step up its efforts in hopes that it can stop its downhill slide by a court victory over Intel.



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RE: it's becoming ridiculous
By SlyNine on 6/8/2008 2:44:56 AM , Rating: 4
Actully it wasnt untill Northwood B came out and then it was only by a little bit, Then Northwood C came out and rocked, but shortly later Clawhammer came out and cleaned clock.

So you have the whole 1ghz-2ghz race being DOMINATED by AMD, from the thunderbird core to around the 2500 Barton, and then AMD took over agian with Clawhammer.

See the thing you dont relieze is that we do not know what AMD would have out now if they had the money to do the R&D that Intel had. Money that it doesnt have BECAUSE of Intels anti competitive ways.


RE: it's becoming ridiculous
By xsilver on 6/8/08, Rating: -1
RE: it's becoming ridiculous
By Adonlude on 6/9/2008 12:50:16 PM , Rating: 2
Preech on brother! I know that showing support for Intel here is asking for an instant -1 rating but I just think it is wrong to punish the big guy just because he is richer, bigger, and better in every way.

This is typical government/socialist thinking: cripple the strong to support the weak, such is not the way of nature. Maybe we should venture out into the jungle, find all the lions, and break one of their legs so the prey can have a chance.

AMD should change their slogan to "AMD, The People's Processor Company" because that is the mantra they promote and it is what keeps their company alive in the court room but not in the retail outlet. AMD was born in the court room. They came into this world by suing Intel, now they will stay alive the same way.


RE: it's becoming ridiculous
By pjtomtai on 6/8/08, Rating: 0
RE: it's becoming ridiculous
By SlyNine on 6/8/2008 5:26:05 AM , Rating: 3
Sorry man but Thunderbird was the basic design of the Althon XP's, And they TRUMPED your P4's right up tell Northwood, And Northwood A core did not beat the the Althon XP's it simply matched performence. Barton was such a great deal because the 2500XP like many of todays intels can be clocked much higher.

I remember the first day I got the 2500XP I had it running on stock cooling at 3200speeds. Then when I put the Volcano 11 HSF on it the horrable sound of the crunch, that was the exposed Athlon XP cores.


RE: it's becoming ridiculous
By AnnihilatorX on 6/8/2008 7:44:04 AM , Rating: 2
Thunderbird was a direct competitor to P4 Willamette, the first P4 that came out with performance inferior to P3, moe expensive due to RD RAM, and was hotter than even Thunderbird.


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