Intel’s antitrust and patent settlement with Advanced Micro Devices is good news for A.M.D., which now finds itself $1.25 billion richer, but it is less clear what it does for the general public. Intel has been accused of stifling competition and driving up prices through a wide array of anticompetitive practices, which may or may not continue now that Intel has agreed to write a large check. Government agencies that have sued Intel or are considering it should not back away.
A.M.D.’s suit against Intel, which has been in the works for years, was supposed to be a major antitrust showdown. Instead, A.M.D. has agreed to call off the fireworks for a sum that means a lot more to A.M.D., whose stock price soared on the news, than to Intel. As part of the deal, Intel also agreed to adhere to some new business practices.
Intel is the big gorilla of the microchip industry. Four out of five PCs in the world use its chips, which gives it an enormous amount of market clout that can be misused. Regulators have accused Intel of offering big rebates and co-marketing agreements to induce large computer makers to choose its chips over its competitors’ products.
Intel’s behavior has drawn censure not just in the United States, but internationally. In May, the European Union leveled a $1.45 billion fine on Intel for using illegal, anticompetitive practices. The European Union’s competition commissioner ordered Intel to change how it does business, including not offering rebates conditioned on the purchaser buying less of a competitor’s products, or not buying them at all. Intel is appealing the European Union ruling.
http://www.nytimes.com/2009/11/13/opinion/13fri1.html?ref=opinion
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