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Korean Fair Trade Commission completes investigation into Intel

Today Korea’s Fair Trade Commission (FTC) announced that its investigation into Intel is complete. The original investigation began two years ago after allegations that Intel misused its market dominant position in South Korea to pressure manufacturers to not use processors from its rivals.

“The FTC gained some evidence backing up suspicions that Intel has offered discounts to computer makers in exchange for sealing exclusive deals, and coerced dealers not to buy products from rivals such as Advanced Micro Devices” according FTC official in an interview with Korea Times.

With the investigation now closed, any potential sanctions or fines will be determined by an internal deliberation committee of the Korean FTC. If Intel is sanctioned it will be the second American company to face a penalty imposed by South Korea after Microsoft was fined $35 million USD as a result of bundling software with its Windows operating system.

The panel expects to reach a decision on any sanctions against Intel by October. Chuck Mulloy, Intel spokesperson, told the DailyTech he could not discuss allegations against the company or divulge contents of the statement because the statement of objection submitted by the Korean FTC is still sealed.

Mulloy issued a statement to DailyTech, stating, “We're hopeful that we'll be able to show the commission that the microprocessor market is functioning normally and that this is an extremely competitive market and that our conduct has been pro-competition and beneficial to consumers.”

However, sources close to the investigation told DailyTech that AMD was not listed as a formal complaint party in Korea, but that AMD had filed general complaints against Intel in the past.



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coerced
By IGoodwin on 9/11/2007 7:13:21 PM , Rating: 2
There is no doubt that Intel is a dominant company and can impact smaller companies financially. There are no end of examples where price vaies according to exclusive deals, the only question is if they refused to sell at all.

One of my pet peve's is the Pepsi/Coke availability in a restaurant, not very many have both.




RE: coerced
By Christopher1 on 9/11/2007 9:59:35 PM , Rating: 3
Well, that's mainly because most have found that their customers like one or the other mostly, so they stop keeping the less-popular one on the shelves.
That's the argument I got at our local eateries when I asked them why they had only Coke products or Pepsi products.


RE: coerced
By TomZ on 9/12/2007 9:27:22 AM , Rating: 2
No, that makes no sense. If you assume that 50% of customers prefer each brand, that means that if you only carry one brand or the other, you are disappointing 50% of your customers.

The real reason is that most restaurants have exclusive deals. Maybe legal, maybe not, I'm not sure.

I also think that most people will accept the other brand as a reasonable substitute for the one they actually prefer. This is why exclusive deals are okay from a practical standpoint.

Finally, in my experience, most people prefer Coke for whatever reason. I don't know if it is something regional (I live in Michigan) or something about the branding, or the taste itself, but I often ask people which of the two I prefer, and almost everyone tells me they prefer Coke.

Go ahead Pepsi fans, tell me I'm wrong. :o)


RE: coerced
By masher2 (blog) on 9/12/2007 9:31:12 AM , Rating: 2
> "Well, that's mainly because most have found that their customers like one or the other "

Nonsense. Coke and Pepsi both maintain exclusivity contracts with restaurant chains, contracts for which they grant large price cuts.


RE: coerced
By theapparition on 9/12/2007 10:32:30 AM , Rating: 2
Then they were lying to you. When a resturant wants to offer soda, the equipment is given to them for free, but on a contract basis. Meaning, they can only buy supplies from that said vendor. Also, there are discounts offered to become an "exclusive provider". With that in mind, there is absolutely no incentive to have 2 fountain drink machines, since most customers will accept the similar offering, and it saves the resturant money, time, and space.
Where the Intel accusations differ (since providing special pricing to exclusive merchants is not illegal), is that Intel withheld shipments to "punish" those who didn't comply. That would be analagous to Coke delaying shipments to a 7-11, because they refused to stop selling Pepsi.

I'm not taking sides on the issue, just repeating the claim. I still think the burden of proof (in the US) will be that "unfair" practices have hurt the consumer.


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