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An AMD-commissioned report claims Intel's practices hurt the industry on a massive scale

According to a recent AMD-commissioned study by research firm ERS Group, Intel gained approximately $80 billion USD in monopoly profits over the course of 11 years since 1996. ERS Group director Dr. Michael A. Williams, said that while gaining billions in profits is normal for a company of Intel's size, Intel gained an extra $60 billion by using anticompetitive business practices. Essentially, Dr. Williams' report claims that Intel overcharged for microprocessors and other related products.

Intel has been in a legal situation with the European Union for the last several years, being a prime target for antitrust investigations. Just recently, Intel disputed the EU's claims that its business practices negatively impacted the market and consumer spending. Intel claimed that many if not all complaints were directly from AMD and not customers at all. True enough, most of the complaints filed to the EU have been by AMD and companies that received subpoenas from AMD to release information.

"We are confident that the microprocessor market segment is functioning normally and that Intel's conduct has been lawful, pro-competitive, and beneficial to consumers," said Intel senior vice president and general counsel Bruce Sewell in a statement.

According Dr. Williams' report, Intel collected roughly $141.8 billion USD in profits from 1996 to 2006. The report subtracted normal competitive profits as well as economic profits and something called "assumed advantage profits" of 5%, leaving Intel with $60 billion in monopolistic profits. Despite assumptions using what the report called "standard economic methodologies," it is impossible to determine exactly just how much extra profit Intel gained from a monopoly.

"To be conservative, the study next provided Intel with a generous assumption that 5 percentage points ($28 billion) of its economic return were attributable to legitimate advantages. That left the $60 billion monopoly profit figure," indicated the report.

Assumptions aside, Intel has done very well over the last several years. Its price structure however has not changed drastically -- flagship processors always carry a big premium while lower models always give the better value. Intel's halo processors typically carry a price tag of roughly $1,000 at retail; Intel value processors occasionally fill a sub-$60 price point.

An area outside of the legal system where AMD constantly competes with Intel is in prices. Over the last two years, the price war between AMD and Intel has been nothing less than beneficial to the consumer. AMD recently cut prices on its multi-core processors, giving another shot in the arm to Intel. In this back and forth price cutting, AMD essentially reduces its potential profits. Intel traditionally competes by using heavy marketing campaigns that run on a global scale, but AMD's marketing strategy heavily focuses on the U.S. market -- a small percentage of the overall global market.

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By Beenthere on 8/5/2007 10:30:43 PM , Rating: 0
Now it's time for the execs at Intel to do prison time for their crimes like any other criminal and for Intel to be fined no less than $600 BILLION for their crimes against society. Every person who has purchased a PC or mobo or CPU in the past 8 or so years has over-paid because of Intel's violation of anti-trust laws, intimidation, threats, and other unscrupulous behavior designed to maintain their illegal monopoly.

Talking Jive doesn't change the facts that Intel is guilty and has been found to be guilty by several countries.

Jail time and a hefty fine is the only reasonable punishment for these crimes.

By Conroe on 8/5/2007 11:50:47 PM , Rating: 2
This is not in criminal court.

By Ringold on 8/6/2007 2:58:19 AM , Rating: 2
Translation to the rest of the world: Don't be too good at whatever you do, because maximizing success gets your ass in jail. Mediocrity FTW.

By Moishe on 8/6/2007 9:46:27 AM , Rating: 2
crimes against society... LOL... give me a break.

By Misty Dingos on 8/6/2007 10:25:26 AM , Rating: 1
What is really tragic here, is that some people really think that Intel is some evil maniacal regime that is trying to spread chaos terror and substandard computing products. I mean really to think that there is some evil cabal at the head of Intel and they spend every waking moment trying to screw the consumer and get more money than god is just crazy. In the Intel corporate offices they spend their time just like most corporations. Trying to produce a product that the public will buy. Get and maintain a industry lead so that they can at least have some idea as to where the market is going and keep the company profitable and marketable. No evil group of old dried out old men seeking to line their coffins in platinum, no Mr. Evil running the show. Has there been gross examples of corporate mismanagement and greed? Oh sure. Enron is a good one. But that isn’t Intel.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

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