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New York Attorney General Andrew M. Cuomo  (Source: Groll/AP)
“We intend to stop them" -- New York Attorney General Andrew M. Cuomo

Intel is no stranger to lawsuits. The company was slapped with a $1.45B USD fine by the EU in May of this year for anticompetitive practices. The charges leveled against Intel mainly focused on illegal methods Intel used to keep AMD from gaining in traction in the marketplace.

At the time, EU competition commissioner Neelie Kroes noted that, "[Intel used] used illegal anticompetitive practices to exclude its only competitor and reduce consumers’ choice — and the whole story is about consumers."

The Santa Clara, CA-based company later appealed the ruling with Intel spokesman Chuck Malloy saying, "Our position is that the decision was wrong and we said that from the day it was announced. It was wrong on many levels."

Now it appears that Intel is facing another lawsuit -- this time on its own home soil according to the New York Times. New York attorney general Andrew M. Cuomo is going after Intel this time with a federal antitrust lawsuit. Like the aforementioned EU case, Cuomo asserts that Intel used illegal tactics to stifle AMD.

“Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,” said Cuomo. “Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices.”

The NYT adds that the state of NY's action against Intel could mean that the FTC could step in as well with charges of its own. "These are separate investigations, but it would be very surprising for New York State to go off on its own without being fairly confident the FTC would pursue Intel as well," a person familiar with the situation told the NYT.

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Smoking guns
By Wierdo on 11/5/2009 8:51:43 AM , Rating: 2
(original post:

(info source:

135. On November 4, 2005 Otellini reported internally in a “Confidential — DO NOT FORWARD” email about “one of the most emotional calls I have ever, ever had with [Michael Dell].” In this email, Otellini wrote:

- [Michael Dell] opened by saying “I am tired of losing business” … he repeated it 3-4 times. I said nothing and waited.
- He has been traveling around the USA. He feels they are losing all the high margin business to AMD-based sku’s …
- He is ‘tired of being behind for 4 years (when I protested that it was 2, he said, no the last 2 years, this year, and next year).
- As a result, “Dell is no longer seen as a thought leader”

136. On Nov. 10, 2005, Michael Dell followed up with an email to Otellini: “We have lost the performance leadership and it’s seriously impacting our business in several areas.” Otellini’s reply: “There is nothing new here. Our product roadmap is what it is. It is improving rapidly daily. It will deliver increasingly leadership products … Additionally, we are transferring over $1B per year to Dell for meet comp efforts. This was judged by your team to be more than sufficient to compensate for the competitive issues.”

137. Michael Dell, however, continued to press home to Intel its performance deficit and its effects on Dell. On November 24, 2005 he capped an email exchange with Otellini by writing: “None of the current benchmarks and reviews say that Intel based systems are better than AMD. We are losing the hearts, minds and wallets of our best customers.”

139. On February 16, 2006, Intel took note of a service report in which Dell’s CEO Kevin Rollins had said that Dell had “made no plans to begin using” AMD chips. “Finally something positive” commented one Intel executive. Otellini commented: “The best friend money can buy.”

140. By April 2006, Dell’s relationship with Intel reached a breaking point. As Michael Dell wrote: “Intel – we overestimated both their ability to execute and our true competitive position with them and we underestimated AMD. And we relied too much on rebates from Intel.”

141. Dell was finally ready to act, despite the pressure and incentives from Intel. In an April 29 email to other top Dell executives, Michael Dell wrote: “We have been looking at the situation for a long time, and have decided to introduce a broad range of AMD based systems into our product line to provide the choice our customers are asking for.”

142. The reaction of Craig Barrett, Intel’s Board Chairman, was unequivocal: Dell should immediately be deprived of the payments it had long enjoyed in return for its willingness not to offer AMD products, and should start paying “list prices.” Barrett told Ottelini: “[T]hey have just signaled they are only interested in being a transaction based customer. I think you
should reply in kind. Not a time for weakness on our part. Stop writing checks immediately and put them back on list prices asap.” (Emphasis added).

143. The direction Otellini gave his subordinates the next day was consistent with Barrett’s advice. Intel should make clear to Dell that if Dell offered any AMD products all of the “mcp” payments Dell received from Intel would be at risk – just as Dell had always feared: “[W]e should be [pre]pared to remove all mcp and related programs. Post haste… then we ought to enter negotiations.”

"And boy have we patented it!" -- Steve Jobs, Macworld 2007
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