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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 Belard on 6/8/2008 4:12:36 PM , Rating: 1
No... .I said a TOP end Intel Quad system vs a Top end AMD is about $3500 vs $1200 for very much the same parts. (IE: HDs 2x 1TB drives, gigabyte board with PCIe 2.0, 4GB of RAM)

AMD 780G board = $100~135 ($135 = 790 chipset)
Intel X48 board = $260~350
4GB DDR3 = $300 (intel top end)
4GB DDR2 = $100

AMD Quad (unlocked) = $235
Intel Q Extreme = $1500+

The Popular Q6600 on par with AMD's top end, still costs a bit more when you factor in the motherboard and cost of chip.

No competition = we lose. Doesn't matter if its AMD, Intel, Nvidia or Microsoft. Because MS owns about 90% of the desktop business, they rip people off charging $220 for the Vista Home Prem (retail) - sure you can buy the Upgrade for $125, but if anything is messed up on your current XP or you have to do a fresh re-install, its a pain in the butt. Apple charges $120 for their OS, and its 1 version. Not basic, premo, business, Ultimate - not OEM, Upgrade, Retail... just 1 box, simple. You can upgrade or do a clean install with it. Or what if you want to upgrade 3 XP computers home PCs to Vista... Ouch, that's $370~400 Apple charges $170 for a 5 user Home licence. (We won't touch Linux on this one).

Because Nvidia had no competition - they sold 8800 cards for $400~600. Nowadays, we're getting steals with $150 cards from both AMD & Nvidia with great products. 9 months ago, you'd have to pay $200 for a crappy 8600gts if you couldn't afford the $300 8800GT or $400-500 8800GTs/GTX cards. And in the next month or so - we'll have NEW cards from both camps.

Without AMD Kicking Intel in the balls with better AMD64 CPUs (which are NOT bad chips - they got old, yet they are ACTUALLY quite good by todays standards compared to lower end Core2s and any P4 tech CPU) - there would be NO CORE 2 CPUs.

You are NOT feeling the pain of Intel because AMD has been around doing good things.

You're welcome.

PS: I've look at intel for my next box. I'll save about $250 going with AMD setup that is just as fast. But my X2 3800 is still running quite good, not as instant as the new PCs I build. But my notebook will have an Intel Core2 CPU because that is all Lenovo offers.

RE: it's becoming ridiculous
By DeepBlue1975 on 6/8/2008 9:05:58 PM , Rating: 2
Not a fair comparison at all.

If you compare what a Bugatti Veyron costs (top end performance car by Bugatti) vs what the fastest performance car ford can offer you costs, its a lot of difference, but it is in performance as well.

Pit the phenom against a q6600 that performs a bit better than amd's best (and overclocks even better), use ddr2 instead of ddr3, because AMD does not support it yet and adds almost nothing in performance, and the difference is not that high.

RE: it's becoming ridiculous
By FaceMaster on 6/12/2008 8:15:38 AM , Rating: 2
High end prostitute - £150 a night
Your Mum - Free.

I know which one I'll be choosing!

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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