RSSAMD Renews Antitrust Rhetoric, Reopening Intel + HP Complaint
By Scott M. Fulton, III | Published January 31, 2007, 7:24 PM
As the San Jose Mercury News reported this morning, AMD Executive Vice President for Legal Affairs Tom McCoy, speaking yesterday before a gathering of technology executives at the University of California at Berkeley, told the moderator -- a lawyer with the US Federal Trade Commission -- that he believes the US Government has been lax in its antitrust enforcement in recent months. As an example, McCoy re-ignited an old quarrel with Intel, addressed in of its federal antitrust complaint that has not been dismissed by Judge Joseph Farnan, and which some observers say may still have legs.
McCoy reminded the gathering of two substantive parts of its complaint, one of which resulted in the type of enforcement response in Japan that McCoy says is lacking from US officials.
According to AMD, in 2003, HP was negotiating with AMD for a deal that would result in AMD processors being included in its new line of Evo computers. But HP asked to be paid for that privilege, as AMD alleged in its original complaint against Intel, requesting that $25 million be paid per quarter to help offset what was anticipated to be retaliatory response from Intel.
As the complaint describes and as McCoy cited, "Eager to break into the commercial market, and to earn a place in HP's successful 'Evo' product line, AMD agreed instead to provide HP with the first million microprocessors for free in an effort to overcome Intel's financial hold over HP.
On the eve of the launch, HP disclosed its plan to Intel, which told HP it considered AMD's entry into HP's commercial line a 'Richter 10' event. It immediately pressured HP into (1) withdrawing the AMD offering from its premier 'Evo' brand and (2) withholding the AMD-powered computer from HP's network of independent value-added resellers, the HP's principal point of access to small business users for whom the computer was designed in the first place."
HP ended up only utilizing 160,000 of the free million processors AMD offered, the complaint says. As a result, McCoy said yesterday, customers paid more for Evo computers than they might have otherwise. "Customers paid more and were forcibly deprived of AMD alternatives," the Mercury News quotes McCoy as saying.
Today, BetaNews asked an AMD spokesperson for new clarification on this issue. We asked whether there might have been a more practical or logistical reason for HP's partial rejection of AMD's offer. We also asked whether it might have been reasonable, in hindsight, for HP to have been suspicious of AMD's motivation for wanting to give away a million processors. The spokesperson declined comment on these issues, referring us instead to the original complaint.
The second renewed element of the complaint to which McCoy referred was an allegation that Intel offered rebates to customers of as much as 10%, for purchasing Intel processors that met or exceeded target levels.
The Japanese Fair Trade Commission took Intel to task in March 2005 for rebates it was found to have offered to Japanese OEMs, rewarding them for processor purchases amounting to between 90% and 100% of their product lines.
McCoy argued yesterday that the US FTC's inactivity on these and other antitrust issues constitute a "retreat" from enforcement of Section 2 of the Sherman Antitrust Act.
For its part, Intel continues to categorically deny any wrongdoing, including with regard to these two allegations, though in March 2005 the company said it would comply with the Japanese FTC's recommendations.
Yep, Intel has always had the policy that if you didn't play exclusively with Intel, that one's supply of Intel processors might mysteriously fall short of one's manufacturing needs.
In fact, whether it is good business or not, Intel is well within its rights to refuse to deal to any user of the competitions goods. Just as Ford, GM, Toyota and many other manufacturers do.
Thus one needs to make a decision as a B2B customer. You either deal with the strong arm tactics, or you tell them to take a hike and go with AMD or one of the other sources.
And thus far many have simply chosen to complain about Intel as they say either that no one cares what make processor is in a machine, or that AMD is as good or better than Intel, or simply that Intel is a pain to deal with. That's nice, but they fail to explain why the vendors aren't as swooft as these fanboys think they are. And they have not explained why the vendors don't simply go with AMD.
The point is not whether Intel is a pain in the @ss to deal with. Does anyone really debate this? I think that is a given.
The point is that B2B customers DO have a choice. It may not be as attractive as they might like. But they DO have a viable choice.
And just like their predecessors who had choices but CHOSE instead to keep buying Windows as they cried for the gubermit to save them from themselves, the PC manufacturers can make a choice as well.
They can keep dealing with the Intel evil empire, or they can take their business and go with AMD and 'all of their worries will be over' - despite the ebb and flow of the value pricing market model in which the industry functions!
Oh, but wait! Maybe the dynamics of the value pricing model make dealing with both Intel and AMD worth the pain of dealing with both manufacturers, and with Intel in particular! But I guess one needs to understand the business side of business to appreciate this! Gee, the subject of market economics sure is complicated!
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Intel has always been known for its "hold a gun to your head" strong-arm tactics, when I worked for Applied Materials, It was known that The Intel CEO kept an unsigned letter severing all business with Applied Materials that he would threaten to use if Applied Materials failed to agree to any and all of Intel's terms and Conditions relating to Equipment and Materials costs.
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from 1998 to 2003 Intel pressured all manufacturers into excluding AMD products from their computers. With Dells admission of this and this subjective evidence, I would believe that AMD still has a viable case. You guys are missing the point, this isn't about now! Not even about when AMD had the 64 bit cpu...it is about 3-8 years ago before you could buy an HP or Dell with an AMD cpu.
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Hmmmm...
Let's see, if I wanted to buy a commercially marketed PC at a major retailer, I guess I could just walk in and ask for any OS or even for no OS...as long as its Windows.
A good reason to build a PC, buy a whitebox or a Mac. You have choices, assume some responsibility and make them!
Intel did use their leverage to guarantee the availability of processors to OEMs who committed to Intel. And they 'could not' (nudge nudge wink wink) guarantee availability to those who also used AMD. OK. Such a conundrum! Help me Mr. Wizard!
Unfair, shortsighted, 'not nice'...Maybe. You still have a choice. Make it or shut up.
This sounds like the same BS that Windows users whined about as they continued to buy Windows and then cried that the gubermint should save their poor whiny asses.
AMD would be better served by putting their efforts into developing a strategic technological advantage instead of copying a page from the SCO textbook.
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Apparently Intel felt that AMD already offered such a strong product that it had to try to defeat its use since it would be hard competition with them. Building a better mouse trap only works if you can get it to market. There have been many superior products in a variety of industries that have been squashed by the competition. AMD is just looking for a fair fight in this case.
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Hmmm. Had AMD presented such a grand mousetrap, HP could have simply gone with AMD without fear of Intel. Especially as AMD presented a better product that could more than easily competed with Intel.
And if that was indeed the case, what leverage does Intel really have? HP could have told Intel to take a jump. Why not?
The fact is that both Intel and AMD follow a value pricing model that is a actually an implementation of Schumpeter's "Creative Destruction" concept.
Meanwhile AMD has offered few real innovations. Instead they have focused on others economy of scale for production (IBM early on in its history) and licensing technology (SOI, etc.) primarily again from IBM in order to simply build an x86 clone. Their advantages in bus topology still have not convinced enough that they offer a strategic advantage and they again trail the innovation of Intel.
Nothing prevents others from using their products except as they still feel dependent upon Intel's products. Anyone willing to fall from the position of a primary partner of Intel can easily partner with AMD. And nothing prevents Intel from using guaranteed supply of material to non-premium partners.
Again, nothing prevents anyone from dumping Intel. AMD makes a perfectly fine product. Is it always the fastest or most technologically innovative? No. Does it work? Yes. There is little difference between this and an independent car dealer being told that if he wants to carry both Toyota and Ford, that he might not get all of the Fords he wants - or none at all, as Ford may say it won't deal with a vendor of the competition.
Nor is there a difference between this and PC vendors who have a choice of bundling Windows with the machines. They don't have to bundle Windows. There are viable alternatives.
Fair fight? No one is squashing anyone. Vendors and consumers do have choices. And vendors and consumers ARE making choices.
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Another Intel fanboi..?
Fact is that Intel used it's market position to TELL computer builders to only use there products. Sorry to tell you but most computer buyers... i.e. the general public...don't care what processor comes in a system and especially at the time of when AMD is talking about...about 3 to 8 years ago. What a user looks at was cost. That is why there are still Cyrix boxes lurking around from just about 5 years ago.
Intel didn't build a better mousetrap...they kept using the same crappy one and as AMD started to show signs of life and developed a competitive product Intel squashed them by unfair competition. Do you understand that? Probably not.
When a company makes sure that 90 to 100% of all your products contain theirs...does the consumer have a choice? What choice do you have when a computer builder is 100% Intel because Intel said "do as I say or I will cost you billions".
If you are HP and you get a major discount for buying 90 to 100% Intel then what do you do when AMD shows up? We all know that Intel processor prices are inflated but how much of a discount did they actually give HP for NOT taking on AMD? What would happen if HP did take AMD's offer and Intel did raise HP's cost? Instead of $1000 pc you need to fork over $1200 for an Intel chip...or you could buy AMD at $800....or less...remember...HP turned down 1 million free processors...because of Intel's threats.
By the way your time line of AMD to Intel sucks ass. I suggest you go back and learn the true nature of the chip market before you keep on spewing your pro-Intel gibberish. The SOI chip model is no longer a clone...I suggest reading about "why" AMD has always cloned Intel. Furthermore you might want to know where Intel's 64-bit extensions came from. Just a hint...the "few real innovations" quote shows that you have no idea what deals AMD and Intel truly have which means you have no idea what you are talking about when it comes to AMD v. Intel.
PS...Microsoft was already sued and lost or settled in several cases for antitrust and there are more going on right now...I would seriously stop posting that which you know nothing about.
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You are a complete idiot! Not only do you lack the ability to read for meaning, your revisionist history and your complete misinterpretation of my point only reinforces your talented demonstration of lunacy!
Me pro Intel???? ROFLMAO!
Power makes Intel and AMD look like Gameboys in comparison.
And SOI was licensed by AMD from IBM. Deal with it fanboy! AMD did not develop it. It was an attempt on the part of AMD to gain a strategic advantage in their X86 clones - as they didn't develop the x86 platform either, numbnuts.
All Intel did was to tell users that if they went with AMD that they could not guarantee them the availability of the Intel chips they wanted.
Is that "forcing" them ditz? Nope! But it does say that the PC manufacturers were so afraid of losing the Intel business that they caved! In other words, the Intel supply was more important than their using only AMD!
Let's say this again slowly for you fanboy, if they only cared about AMD, they could have told Intel to go take a jump! DUH!!!!! "Forced" my @ss!
So IF HP HAD taken AMD's offer, they could have lowered the cost of ALL of their PCs as they wouldn't have to deal with Intel at all! DUHHHH! But they CHOSE not to do this! Fascinating isn't it!?
Customers don't have a choice?? Really Mister Lemming? Ignorance is not only rampant in your house, it must also be a very peaceful place.
The fact is, businesses are customers too - and they do have choices between AMD and Intel! They can choose to deal with either one or both. And if they deal with Intel, they deal with Intel's market restrictions. Just as car dealerships do. But NO ONE "forces" anyone to do it! If you don't like it, go with AMD and stop whining! Poor baby!!!!
...AMD's processors are not an x86 clone? x86 is a standard defining interoperability. Get you head out of your posterior! SOI is a manufacturing technique, not a new type of processor! But then I guess you think moving to a new dye process format, be it 90nm, 65nm 45nm, etc., is a new processor too and not merely a new manufacturing process for the x86 compatible products! You are a complete idiot!
And all of the 64 bit extensions did no come from AMD, although yes, Intel did license them for compatibility purposes. Fact, Intel was into 64 bit before AMD. But then you are obviously ignorant of their full product line. And IBM was into 64 bit >10 years ago which makes BOTH Intel and AMD look pretty puny! (And if you were familiar with the full Power line, you would know that this is a FACT!)
Really? Was MS sued for antitrust? I am sure there is some point to this other than the one on the top of your head! But I suspect that if you comb your hair just right, fewer will notice.
I love it when some 19 year old looks up from his cereal box and thinks they are aware of computers with their 'BIG' modded PC with the neon LEDs and a rad striped RAID (WOW!!!) over a read/write filesystem. LOL! But I guess you don't understand the irony of that nonsense as well.
And AMD has made few original innovations. They have licensed most of the newer technologies from IBM. And their hyper transport bus configuration is not their innovation either - and it offers advantages over Intel's shared bus structure. They simply implemented it.And the reason that AMD was able to leverage their 64 bit extension set was that they were the first to market with a 32/64 bit chip with mass market appeal while Intel was busy telling people that they had to abandon the 32 bit universe for the 64 bit world without a concurrent environment. Intel screwed up. But Intel was definitely in the 64 bit realm before AMD got there! Its all about packaging and marketing.
So where is this grand list of AMD sourced innovations that THEY developed IN HOUSE? Not SOI, not Hypertransport bus structure, not x86, ......
You might want to go back and look up the value pricing model and Schumpeter's Creative Destruction models of which you CLEARLY have no knowledge. And no, sorry to say you will not find them on the back of the box of your marshmallowy cereal.
Talk about ignorance...it's hard to compete with your demonstration of the principle!
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"Dells admission of this and this subjective evidence"
You are wrong about submission on innovative CPUs. Dell accepted AMD because of PRICE ONLY. But, since AMD is now supplying Dell, AMD has been ignoring the retail area because they can't keep up with the demand from Dell. There are many AMD vendors that are extremely bitter with the giganto-greed of AMD management.
The game that all OEMs play (regardless of supplier) is that they want everything from you, and if you can't meet their expectations then they trash you.
The complain that AMD makes is based on the backstabbing game OEMs play with all suppliers. So, how much truth (if any) is in AMDs big baby complain? Is IBM also behind this persuasive game from AMD because of Apple? Can AMD meet the entire global OEM demand?
Beware of corporate egocentric PR!
The monster AMD is trying to fight, is the monster AMD will become.
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The only reason for an OEM not to use 64-bit AMD processors before the release of the Intel Core processors would be if Intel was pressuring them into using their Pentium 4 CPU's.
Seriously, who in their right mind wouldn't have wanted to have a 64-bit AMD processor in their computer before Intel introduced their Core processors?
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I used to feel bad for amd but it seems now they are grabbing for straws. Intel has finally come out of the closet with a superior product. Amd was the key to that and had a very big success for a very long time int he processor world.
I hope they come out with a product worthy enough to compete with the core 2 duo. I was a huge amd fan boy and hated intel with a passion but its hard to hate a company that finally got of their lazy rich butts and did something oustanding. Good for you Intel its about time, Amd now has to come back, I honestly don't know fi they will.
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Just a little something to add.
AMD didn't have a superior product until they went away from the licensing agreement with Intel...and then broke the 1GHz barrier first. They then built a core that was faster and better even though it ran at a slower frequency. Intel had to change there core to get ahead which in any normal enviroment...i.e. ATI/nVidia...is quite normal all the time.
So basically you had about 20 years of AMD number 2...Intel number 1. Then AMD number 1 for about 3-4 years and now Intel number 1 for the last 6 months. Expect each of them to stay ahead of each other on 6 month terms from now on.
Oh...and if someone told you "Sorry we can't sell your product here because it might piss this guy off" how would you feel?
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