Timeline Set for Intel/AMD Antitrust Trial

Vitaly Friedman writes "The stage is set for the biggest tech battle in years: the antitrust lawsuit filed by AMD against rival Intel. What sort of effect is it likely to have on the industry and the consumer? From the article: 'Last year, the company filed an antitrust lawsuit against Intel, claiming that their rival had "unlawfully maintained its monopoly by engaging in a relentless, worldwide campaign to coerce customers to refrain from dealing with AMD" for more than ten years. AMD has already subpoenaed computer manufacturers, retailers, and even Microsoft to provide documentation pertaining to the case. Now, the timeline has been set for the trial of the Megayear to commence.'"

Great....

[ZoneGray]

Just seems strange.... Intel is the one accused of antitrust violations.... meanwhile the lawyers for the two sides get together and agree that it will take them two or three years to figure it all out.

Intel gets screwed either way

[the_humeister]

If they continue to do what they're allegedly doing, they might lose the case. If they relent a little, AMD its marketshare. At least the consumers win though.

Timeline

[Metabolife]

The trial is set to take place in 2008, don't know why this wansn't mentioned in the summary. It's hard to predict an outcome in this case. Was Intel simply using normal business sense when they tried to retain their power? It's not illegal to have a monopoly, but when you start harming the consumer things change. Did the large discounts Intel offered its customers to stay Intel harm the consumer or help? I'm sure many smaller businesses benefited from buying a certain number of (similarly priced to AMD) Intel chips to gain a discount. Isn't that creating more competition in the end? This case could set a precedent for what constitutes illegal practices by a larger company.

Re:Timeline

[gEvil (beta)]

This case could set a precedent for what constitutes illegal practices by a larger company.
Since the case only starts in 2008, this is largely dependent on who is elected president that year. If we end up with another pro-business administration, this case probably won't have any effect whatsoever. If we end up with a more consumer-friendly administration, then yes, this could be a precedent-setting case. Of course, this all assumes that Intel is found guilty, which isn't a particularly wise assumption to make at this stage.

Great News

[egarland]

It's pretty obvious from the current Dell situation that Intel has tried to keep AMD out and that's illegal.

Anti-competitive behavior hurts everyone. It hurts the customers, the economy, competitors and eventually erodes the competitive spirit of the company engaging in it.

Anti-competitive behavior seems to be running rampant these days and its important that Intel get in trouble for it. If they get away with it sends a signal to the business community that it's ok, everyone can do it. If they get meaningfully punished it will send a signal to businesses to clean up their acts and play fair.

The capitalist economic system requires fair competition to work properly. The computers and electronics industries have gone far away from fair competition and everything needs a real shake up.

Re:Great....

[ZoneGray]

In a better world, both companies would be suing the lawyers.

Re:Monopoly?

[reldruH]

That still doesn't prove that Intel didn't have a monopoly, or that they illegally tried to maintain it. Just that if all that is true, they were unsucessful at it, which is entirely possible.

Re:Monopoly?

[NutscrapeSucks]

AMD has had about 20% of the CPU market for 10 years now, so nothing is eroding. Their problem is that it has been the worst 20% (least profitable consumer segmenet for the most part, alhtough that's changing).

Intel's argument is:
(1) AMD sells every CPU it can possibly make
(2) AMD only has capacity for ~20% of the market
(3) The fact that AMD can't make profits on these CPUs is AMD's problem, not Intel's.

That's an easy 5-pointer

[Infonaut]

Just seems strange.... Intel is the one accused of antitrust violations.... meanwhile the lawyers for the two sides get together and agree that it will take them two or three years to figure it all out.

It's called civil procedure [wikipedia.org] and it is in place to ensure that each side gets an opportunity to bring in all relevant parties, conduct thorough discovery, and reach a decision that isn't arrived at in an arbitrary fashion. It's certainly not perfect, but if you were charged with a violation that could seriously affect your business, you'd want all the facts to be laid out on the table before a judge just arbitrarily swooped in and made a decision based on idle whim.

Sure, lawyers make money when companies have disputes. Perhaps that's just the sad side effect of the rule of law in a complex society. The discovery process in particular takes a very long time because finding all of the pertient information in a suit involving two massive organizations, spanning a period of many years is not easy.

Nobody wants the alternative, a society without laws, where the party that can dish out the most physical violence wins the dispute. Then again, lawyers are convenient scapegoats for all the wrongs of our society. It makes sense. After all, nobody really cares all that much for plumbers until their drain gets backed up.

Re:Timeline

[heinousjay]

What would be consumer friendly about Intel being punished, exactly? Their product is plentiful, cheap, and ever increasing in quality, not to mention embroiled in healthy competition. I don't see how hurtitng Intel at this stage would benefit anybody but AMD stockholders.

Question for the hardware techies

[Starker_Kull]

Is there really that much of a difference between using an Intel chip and an AMD chip? I know you need different motherboards and chipsets, but isn't that about it? As far as I understand, there is no difference in the applications, other hardware, etc. So the only thing you would have to maintain (as a boxmaker) is another set of motherboard specs and the BIOSes for them, and in exchange you get (today) better performing chips for the wattage. The fact that a massive organization like Dell has not done so leads me to think that Intel has been doing some arm-twisting.

OTOH, with Apple, which likes working with as small a set of hardware combinations as possible, I can see why they would only want to maintain one microprocessor family, motherboard chipset, etc.

So hard would it really be (financially, organizationally) for a Dell, Gateway or Apple to add the AMD chip to its lineup? Anyone have any concrete knowledge about this?

Re:That's an easy 5-pointer

[heinousjay]

You make an almost compelling argument. Are you a lawyer?

The thing is, you give a sense of only two choices, and the dichotomy is false. We're not stuck choosing between anarchy and lawyers running everything. There are infinite levels of complexity in the legal system that can be simplified or eliminated, but since lawyers are currently the ones running everything, that won't happen.

Re:Monopoly?

[MobileTatsu-NJG]

"What if AMD's chips were better than Intel's in every conceivable aspect (price, preformance, power dissipation, etc) and they can only manage a 20% market share? Doesn't that scream that's there's an artificial constraint placed on the market somehow?"

No. Inferior products win all the time. Oh, and on a totally unrelated note, Intel markets their brand. There are Intel commercials on TV. From a mass-market (i.e. not well informed) perspective, how can AMD be seen as anything other than a cheap knock-off?

So, no, it doesn't scream "artificial constraint". That doesn't mean it isn't there, but that rationale alone doesn't float the boat.

Re:Monopoly?

[tddoog]

Practically every business engages in anti-competitive behavior. That's how the game works - you beat your competition by doing things that hurt them.

This may be true, but that doesn't make it right. There is a difference between being competitive and being anti-competitive. It may be sort of a gray line, but that doesn't make all actions ethical or legal.

Some things are competitive: better products, better prices, better advertising

Some things are anti-competitive: pressure on your suppliers for more favorable conditions, favors to your customers in exchange for exclusive business

There are cases when things in either category can be switched. For instance lowering your prices until you put someone out of business because you have deeper pockets and then raising prices after the business has shut down. Or there are cases where a business promises to be sole source and provide you a discount because of volume sales.

I expect anti-competitive behaviour because businesses exist to make money, but if you do not draw a line anywhere, the strong will get stronger and the weak will get weaker.

I personally don't think we have done enough to keep businesses in check, but I don't care enought to do anything about, besides writing this post.

Re:Monopoly?

[cheezedawg]

What if AMD's chips were better than Intel's in every conceivable aspect (price, preformance, power dissipation, etc) and they can only manage a 20% market share? Doesn't that scream that's there's an artificial constraint placed on the market somehow?

Sure- there is an artificial constraint at play here, but that constraint is AMD's lack of foresight to invest in manufacturing technology and capacity like Intel has. Quite simple, AMD lacks the ability to fill the kind of volume and low defect rates that the large OEM suppliers like Dell and HP require from their suppliers.

You might recall 5 or 6 years ago when AMD proudly announced that they had partnered with UMC to manufacture their chips, and AMD's CEO declared that now "AMD will not need to expend billions and billions of dollars on incremental production facilities to achieve our market share objectives." Of course that partnership ended up falling through, and now AMD CEO Hector Ruiz has publicly stated that AMD is capacity constrained- they are selling every chip that they can make. Manufacturing capacity doesn't just magically appear- it takes a lot of time and a huge amount of money- neither of which AMD is spent enough of.

AMD's position in the market today is a direct result of the poor decisions they have been making for years now. You cannot blame Intel for that.