Wall Street Jounal Blasts EU over Intel Decision

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zsdersw

Lifer
Oct 29, 2003
10,560
2
0
Originally posted by: Viditor
I think that's the problem you're having...we actually DO NOT have a free market system. Our markets have very stringent rules, so they're really not "free" (that's why there's an SEC, and FTC for example).
Those rules are especially tight when you achieve monopoly status...

We SHOULD have a free market system. The more you intervene in that system through law and government, the more those involved seek ways around such interventions. We want what we want.. and will find ways to make it happen. The more workarounds and loopholes are created or discovered, the more intervention occurs to close those loopholes and the less free everyone becomes. This is wasteful and inefficient.

The government's only legitimate place in the free market is to prevent fraud. There is no fraud here; everyone got exactly what they thought they were getting; CPUs and computers. The relative merits of them compared to competing offerings is irrelevant to the determination of fraud; there was no fraud.

This theory SHOULD work, but there is a caveat...
What if the seller is a vendor whose goods are vital to the buyer's business, and there is no substitute available in the quantities required. Then the seller uses this situation to garner exclusivity and maintain their monopoly...the question is, what happens to the pricing model at that point?

The buyer, in this situation, should change their business if they're not satisfied with the terms and conditions.. and are perfectly free to do so. If enough vendors refused Intel's arrangements, those arrangements would've changed or not happened at all.

While the information was easy to acquire (if you know how), how many people actually understood what it meant? I remember many informed posters arguing over which was faster...even with the information at hand. Also, keep in mind that many of those people had no access to the web (either through ignorance or assumed lack of opportunity)

None of which is Intel's fault or responsibility to mitigate.
 

zsdersw

Lifer
Oct 29, 2003
10,560
2
0
Originally posted by: Schmide
We don't have free markets, We have regulated markets. Sorry.

I don't care.. that's irrelevant to what SHOULD be.

I guess you missed the chapters on monopolies, anti-competitive practices, and market manipulation.

I guess you missed the fact that this is about what SHOULD happen and the way things SHOULD be.

Yes blame the consumer. Never under estimate the ignorance of the consumer.

The consumer holds all the cards; they decide with their wallets who survives in the business world and who does not. They have a responsibility to themselves to make as smart a decision as they can.

What if they were forced to sell them in markets where the made much less than they could in more lucrative markets? The totality of their sales, does not exclude anti-competitive activities.

That's called "life". It's often unfair. Neither businesses nor individuals should be shielded by government (and, accordingly, have their freedoms curtailed) against this basic truth.

 

sonoran

Member
May 9, 2002
174
0
0
Originally posted by: Viditor
For example, the reason AMD did not release an MCM of Opteron during the early C2D days was purely financial. They did not have enough cash to develop the mask sets and design (this was actually mentioned in their Conference Call).
And yet they had billions to buy ATI. Maybe the real problem was they took their focus (and resources) away from their core business? There's always a price to pay for that.
 

Davegod

Platinum Member
Nov 26, 2001
2,874
0
76
interesting comparing the wsj article to the economists' (though some apples to oranges since the economist isn't really looking at EU's antitrust in general)
 

Schmide

Diamond Member
Mar 7, 2002
5,590
724
126
Originally posted by: zsdersw
Originally posted by: Schmide
We don't have free markets, We have regulated markets. Sorry.

I don't care.. that's irrelevant to what SHOULD be.

I guess you missed the chapters on monopolies, anti-competitive practices, and market manipulation.

I guess you missed the fact that this is about what SHOULD happen and the way things SHOULD be.

Yes blame the consumer. Never under estimate the ignorance of the consumer.

The consumer holds all the cards; they decide with their wallets who survives in the business world and who does not. They have a responsibility to themselves to make as smart a decision as they can.

What if they were forced to sell them in markets where the made much less than they could in more lucrative markets? The totality of their sales, does not exclude anti-competitive activities.

That's called "life". It's often unfair. Neither businesses nor individuals should be shielded by government (and, accordingly, have their freedoms curtailed) against this basic truth.

Arguing for your utopia? Pure free markets break down as those with power will abuse it. Maybe not all those in power will, but some. That's why were here. If you want to change the law run for office, if you want to argue this case, argue the merits of it.

Would you argue against the judicial branch, keeping check on the laws our legislators make? Is majority rule always right? Maybe we should just go back to slavery? It's a slippery slope in both ways, too much regulation and you reach socialism, too little and you become an oligarchy.
 

Schmide

Diamond Member
Mar 7, 2002
5,590
724
126
Originally posted by: Davegod
interesting comparing the wsj article to the economists' (though some apples to oranges since the economist isn't really looking at EU's antitrust in general)

:thumbsup: Nicely written article.
 

Schmide

Diamond Member
Mar 7, 2002
5,590
724
126
Originally posted by: zsdersw
The government's only legitimate place in the free market is to prevent fraud. There is no fraud here; everyone got exactly what they thought they were getting; CPUs and computers. The relative merits of them compared to competing offerings is irrelevant to the determination of fraud; there was no fraud.

WTH were you in the room when the deals were made? Don't make statements you cant back up. Nice try to simplify the case to sell this buy that. Come on.
 

Viditor

Diamond Member
Oct 25, 1999
3,290
0
0
Originally posted by: sonoran
Originally posted by: Viditor
For example, the reason AMD did not release an MCM of Opteron during the early C2D days was purely financial. They did not have enough cash to develop the mask sets and design (this was actually mentioned in their Conference Call).
And yet they had billions to buy ATI. Maybe the real problem was they took their focus (and resources) away from their core business? There's always a price to pay for that.

They kept their eye on the core business...fusion is a major part of it.
What you have to understand is that it takes 5+ years to make a CPU. AMD made the decision (and most reports show that it's probably the correct one) to put their short term and intermediate health in the crapper so that they could survive for the long haul.
Without ATI, there would be no fusion...and it is a certainty that if AMD kept to a pure CPU and not pioneered the Fusion product, Intel would grind them into dust.

AMD didn't buy ATI because they though it would be cool to get into the graphics business, they did it because:

1. They knew that they must control their chipsets better
2. They had been in design talks with ATI for a year about fusion, and found that it was a necessary product for their survival

I agree that the price was very high, but they really had no other option.
 

Viditor

Diamond Member
Oct 25, 1999
3,290
0
0
Originally posted by: zsdersw
Originally posted by: Viditor
I think that's the problem you're having...we actually DO NOT have a free market system. Our markets have very stringent rules, so they're really not "free" (that's why there's an SEC, and FTC for example).
Those rules are especially tight when you achieve monopoly status...

We SHOULD have a free market system. The more you intervene in that system through law and government, the more those involved seek ways around such interventions. We want what we want.. and will find ways to make it happen. The more workarounds and loopholes are created or discovered, the more intervention occurs to close those loopholes and the less free everyone becomes. This is wasteful and inefficient.

The problem with a free market is that it creates Robber barons (as we have seen). This leads to things like the Great Depression, and even the major financial woes we face now. Do you realize that over the past 8 years, we have had more wealth concentrated into the hands of the top 1% than at any other time in history? Gordon Gekko got it wrong it seems...greed is NOT good.

The government's only legitimate place in the free market is to prevent fraud. There is no fraud here; everyone got exactly what they thought they were getting; CPUs and computers. The relative merits of them compared to competing offerings is irrelevant to the determination of fraud; there was no fraud.

So if I understand you correctly, you think that allowing the rich to prevent others from competing equally is a good thing?
For example, if Intel threatened their customers by withholding supplies if they ever bought any AMD chips, would you consider that OK?
It's not fraud...
The customers could never get their chips from elsewhere because AMD would never have grown enough to supply them...
Intel could charge $2k for chips if they wanted...who could stop them?
Intel would get rich like crazy, but all of their customers would be greatly injured.

This theory SHOULD work, but there is a caveat...
What if the seller is a vendor whose goods are vital to the buyer's business, and there is no substitute available in the quantities required. Then the seller uses this situation to garner exclusivity and maintain their monopoly...the question is, what happens to the pricing model at that point?

The buyer, in this situation, should change their business if they're not satisfied with the terms and conditions.. and are perfectly free to do so. If enough vendors refused Intel's arrangements, those arrangements would've changed or not happened at all.

"Change their business" in this case means get out of business. So you feel it's OK for one company to hold an entire sector to ransom?

While the information was easy to acquire (if you know how), how many people actually understood what it meant? I remember many informed posters arguing over which was faster...even with the information at hand. Also, keep in mind that many of those people had no access to the web (either through ignorance or assumed lack of opportunity)

None of which is Intel's fault or responsibility to mitigate.

If you claim caveat emptor, you must also be assured that it's possible to achieve for a reasonable average person...
 

Nemesis 1

Lifer
Dec 30, 2006
11,366
2
0
Well Viditor looks like were going to find out . Intels roadmap its as plan as day. There going for the Kill. If they weren't the 2 core chip would not be. Intel no longer has the eu on its back . From what I beem hereing Everone is saying Intel needs to lower cpu pricies Looks like intel is going to give em what they asked for inspades. I can't believe they went public and said that. Intel driving the tanks in now.
 

Nemesis 1

Lifer
Dec 30, 2006
11,366
2
0
http://techpulse360.com/2009/0...lem-performance-price/

You tell me this Viditor what kinda of AMD idiot would say intel is over charging for chips . He wants intel to lower Pricies.

Intel not AMDs problems .. AMD is AMDs problem . This guy is complete retard. Does he have a clue as to what he has done. AMD has an intel problem now,

You?re saying that Nehalem chips are overpriced. Why?

Yes. A Dell server with the Nehalem 2.93 GHz chip is 104 percent more expensive (~$6.100) than the same configured server equipped with a Shanghai processor at 2.7 GHz (~$3,000). At this price, I sure hope so that they are faster. So if you?re in a tough economy and you?re trying to make your budget dollars as far as you can, you?re probably not going to buy half as many Nehalem servers but more cost effective Opteron servers.

It?s somewhat disingenuous to layout all the benchmarks and say ?we?ve got a better platform? and completely ignore the pricing aspect of it.
 

Schmide

Diamond Member
Mar 7, 2002
5,590
724
126
Nemesis 1. Look. I know you have your issues and I like you but forward looking statements and performance numbers have nothing to do with this issue. Start a new thread please.
 

Nemesis 1

Lifer
Dec 30, 2006
11,366
2
0
Go play monkey to someones elses back . I don't need an AMD sticken to me .


Here more of AMDs constant BS crying , There alot more to this story than whats written here . Be good I show it to ya.

AMD says Intel-only deal struck at Apple in 2005
by Brooke Crothers Font size Print E-mail Share 66 comments Yahoo! BuzzAn Advanced Micro Devices executive claims that Intel and Apple cut a deal in 2005 that made Intel an exclusive supplier of processors to Apple, preventing AMD from gaining Apple business.


No AMD CPUs are currently used in Apple computers.

(Credit: Apple)The claim, made in a phone interview with Tom McCoy, AMD's senior vice president of legal affairs, earlier this week, holds that Intel has had a longstanding deal to be Apple's sole supplier of microprocessors. To date, Apple has not used an AMD central processing unit (CPU) in any of its products. Currently, only Intel CPUs populate Apple's laptop, desktop, and server lineups.

This assertion by AMD comes in the wake of the EU decision last week to fine Intel $1.45 billion for violating antitrust legislation. Last week's EU decision centered on whether Intel used illegal tactics to deny processor business to AMD at PC makers.

McCoy said that a deal was struck when Apple moved from the PowerPC (IBM-Motorola) chip architecture to the x86 (Intel-AMD) architecture. The transition was announced by Steve Jobs at the Worldwide Developers Conference in 2005.

"They made a deal when they were porting over from PowerPC to x86 as to how much Intel was willing to pay for that port. My guess is that Intel asked for and won exclusivity in return for the help that they gave Apple to port," McCoy said.

McCoy continued: "That deal will not be exclusive forever and when that exclusivity is over, I'm sure they (Apple) will choose on the merits. We'll have a chance to compete for Apple's business when Apple is ready," he said. Intel denies this allegation.

Though McCoy did not make any direct charge of illegal activity regarding such a deal, the assertion is not that far removed from charges made in the July 2005 AMD complaint against Intel. AMD, in that filing, cited Dell, among other examples of exclusive Intel deals with PC makers. "In its history, Dell has not purchased a single AMD x86 microprocessor despite acknowledging Intel shortcomings and customer clamor for AMD solutions, principally in the server sector...Dell has been and remains Intel-exclusive. According to industry reports, Intel has bought Dell's exclusivity with outright payments and favorable discriminatory pricing and service." (Note: Dell, in 2005, offered no AMD-based products, though it does today.)

Whether the deal is exclusive doesn't in itself constitute a legal argument, according to Joshua D. Wright of the George Mason University School of Law, who has written about the EU decision in a blog, "Truth on the Market." "Under Section 2 of the Sherman Act, a plaintiff must show that the exclusive dealing arrangement harmed competition in the form of higher prices, lower output, or reduced innovation," Wright said, responding to an e-mail query.

Addressing the Apple case, Wright said that by granting exclusivity or a large share of their business, "Apple and others are able to play Intel and AMD off each other to get higher rebates. These rebates are ultimately passed on to consumers in the form of lower prices. That's a critical part of the equation here. In other words, when Apple makes a decision whether or not to accept Intel's offer of higher rebates plus exclusivity versus whatever it is that AMD offers, it weighs these different aspects of competition (quality, price, rebate, exclusivity). It is making a decision on the merits of the total competitive package," he said.

Intel says the original Apple decision was, in fact, based on the merits. "Intel won the business based on the merits of its technology and product road maps, which included superb mobile processors and our 45nm Hi-k-based processor roadmap," Intel spokeswoman Claudine Mangano said in response to an e-mail query. "What has resulted from this decision is tremendous product and market innovation. If Intel technology did not perform well and our product road map was not strong, customers would go elsewhere," she said.

The transition was not trivial, according to Intel. "The decision was a large undertaking and a multiyear effort given the customer was porting to a new architecture," she said.

Apple declined to comment on this story.

Analysts agree that the transition from PowerPC to x86 was a formidable undertaking.

"Intel put a significant amount of resources into helping Apple make that transition," said Jim McGregor, chief technology strategist at In-Stat. "There are different ways you could do this. In terms of product pricing, charging for engineering resources, or maybe even--'this is our agreement to provide you with these products in exchange for the engineering,'" he said. McGregor added that AMD may not have had the wherewithal to take on the transition. "I don't know if Apple could even have gone to AMD. Because I don't know if AMD would have had the resources to do that
."

Marion Morales, vice president of IDC's semiconductors research program, said Apple is fiercely independent and, generally, picks suppliers with Darwinian rigor. "Apple is notorious for not being very loyal," he said. "They are always changing suppliers around. Whoever offers the better technology," according to Morales.

"For example, they're using Samsung for the (ARM) processor that's now in the iPhone," Morales said. "But it won't surprise me when they replace that with something that's better. And when you look at the processor itself, they're designing the processor and using Samsung as a foundry (factory)," he said, underscoring the fact that Apple emphasizes internally developed technology and de-emphasizes external suppliers, even large companies like Intel and Samsung.

Morales continued. "Maybe at this point in time Apple is only using Intel. But if they had a chance to use someone else that's better, they would," he said.

The Intel-Apple relationship has had its ups and downs. Though Apple extolled the virtues of Intel's architecture after its transition to Intel in 2006 and continued this in January 2008, for example, when it introduced the MacBook Air--which, at the time, used a special Intel processor--the two companies were not so chummy in October of last year when Apple announced a refresh of its MacBooks, replete with Nvidia chipsets that displaced Intel silicon.

Apple has also acquired chip company PA-Semi, which is expected to design silicon for Apple's iPhone or other consumer electronics devices.
 

Nemesis 1

Lifer
Dec 30, 2006
11,366
2
0
I do not understand the above . Is AMD retarded . They never complained when IBM was so supplier. Why do they hurt themselves like this . This will be in court. THE question will be asked Why didn't you complain about IBM . Than AMD will say well we couldn't do it . We don't have resources for the port.

Next question . So why you complaining about Intel / Apple . Well intel went in worked with Apple for 5 years got the Porting done. Now we feel we should get that business .

After Apple intel did all the work . Spent Millions . AMD just stanky as it get talk slim . there low.
 

Schmide

Diamond Member
Mar 7, 2002
5,590
724
126
Edit: Some does and some is just pure hate for AMD. I think you edited some in. BTW. Either way. It's just cut and paste propaganda. I wonder sometimes.
 

Nemesis 1

Lifer
Dec 30, 2006
11,366
2
0
Oh! Please. I am last person on earth that would change what was put to pen by someone else . Its simple enough to prove ya know.
 

ShawnD1

Lifer
May 24, 2003
15,987
2
81
Originally posted by: Schmide
Edit: Some does and some is just pure hate for AMD. I think you edited some in. BTW. Either way. It's just cut and paste propaganda. I wonder sometimes.

He has a point. Intel probably did do a lot of work to switch Apple over to x86, and part of the business deal would be exclusivity. For the longest time we thought Apple computers sucked because PowerPC processors sucked, but that turned out to be false when both the Xbox 360 and Playstation 3 use PowerPC processors. That means Apple already had access to high end processors and their OS was already based on those particular processors. There's not much technical reason to switch over to x86, so a huge discount from Intel seems like a logical reason as to why they switched.

Anyway, back to the topic of other OEM companies. Are exclusivity contracts legal?
http://radiology.rsnajnls.org/...ent/abstract/156/1/237
Exclusive contracts between radiologists and hospitals may be more frequently scrutinized for antitrust violations because of the Hyde v Jefferson Parish Hospital District No. 2 case. In the Hyde case, the lower court decided antitrust law had been violated, and it was the first antitrust case about exclusive medical contracts to be reviewed by the U.S. Supreme Court. The case is a precedent for considering similar circumstances according to traditional business antitrust analyses such as per se violations, tying arrangements, group boycott, and market foreclosure. Areas that may be scrutinized for anticompetitiveness include hospital privileges when radiologists have exclusive contracts with the community's only hospital or provide services unique within an area, and physicians' access to scarce resources (e.g., computed tomography [CT], magnetic resonance [MR] imaging). Radiologists must understand antitrust implications of their hospital contracts; examine the terms of staff appointment, bylaws, and rights; and be able to guide their attorneys through contract negotiations.

In short, exclusivity contracts are sometimes illegal. They are not always illegal and they are not always legal. AMD really does have a good case to present if they can show companies like Dell were effectively strong armed into selling only Intel products.
 

Nemesis 1

Lifer
Dec 30, 2006
11,366
2
0
Well I tell ya something , If AMD attacks Intel threw Dell It be a hugh mistake, I could even make intel look good on that .

Mike Dell start building PCs in his garage / Dorm . Using intel exclusive from the beginning .

Heres Intel Attorny .

Mr Dell . Is It true that you used Intel exclusively till 2006 . YES

Iunderstand you started in your garage . Yes Sir.

Were you exclusive Intel? yes


How many units did you sell your first year ? XXXX

Did you have a exclusive deal with intel . No You have to remember I started in garage . Intel didn't care about me . But I thought I could build a good business off their CPus .

I see. Was there any other cpu makers you considered ? No . Why is that . Intel has resources and know how . I had to look to future . Any company can slip and fall in this business. I had to choose a company I felt could peek themselves up after a fall . I felt Intel was that company so I choose them .

Did your decision profit and prove wise . Most definitly . You could say I am the American dream . I started in my garage and Grew to No 1 In the world as PC maker . Multi billion dollar Corp. So you were pleased with your deal with intel . Yes and so are are stock owners.

Your no longer exclusive intel is that true. Yes . Why didn't you use AMD exclusive after you had a force in the industry . AMD could not guaranttee the needed cpus we required . OK I see .

How is your business doing now . Well ever since we announced we were no longer Intel exclusive we started losing market share . Has it hurt your business . Yes . Loss of market share hurts all business . So Is AMD a strong company . No there hanging on by a thread . Why is that . Bad management decisions . One reason we were Intel exclusive . AMD maynot be here in a year. OK Thank Mr Dell for your cander
One more question your moving to AMD didn't have anthing todo with sudden turnaround in dells fate did it . I can't ans.That because I really can't say for sure . You seem a little uneasy . Is their something you would like to add . Well In the same time frame we started losing market share . Intel Apple did an exclusive contract . Befor this slump . Apple was gaining market share fast . Veryimpressive . I see than one final question . Would you say Being intel exclusive is good for that business . Well. As my daddy you to say . The proofs in the puddin . LOL Thank you Mr Dell you may step down .
 

Schmide

Diamond Member
Mar 7, 2002
5,590
724
126
I bet the Intel/Apple deal is on the level. It generally happened after the Intel Low time. There was a Subpoenas to Apple so yes that is relevant.

I would kindly ask Nemesis 1 to check the (AMD) hate at the door though.
 

Nemesis 1

Lifer
Dec 30, 2006
11,366
2
0
LOL Your preaching to me, I don't hate AMD . I just don't like cry babies . Your weak hit the gym.
 

zsdersw

Lifer
Oct 29, 2003
10,560
2
0
Originally posted by: Viditor
The problem with a free market is that it creates Robber barons (as we have seen). This leads to things like the Great Depression, and even the major financial woes we face now. Do you realize that over the past 8 years, we have had more wealth concentrated into the hands of the top 1% than at any other time in history? Gordon Gekko got it wrong it seems...greed is NOT good.

This isn't 1929. The consumer is more educated and more choosy than ever before. Banks and financial investors who made foolish decisions should fail and consumers who lived beyond their means should suffer losses as well... stupidity and ignorance have consequences.

The more government and law coddles people and businesses, the lazier and the more dependent on government they become.

So if I understand you correctly, you think that allowing the rich to prevent others from competing equally is a good thing?

These things don't occur in a vacuum; the rich would only get rich if the consumer allowed them to; if their products are attractive to the consumer. As such, they should be rewarded with as much wealth as that allows.

If a dominant company manipulates the market to shut out competition, the consumer can still force the issue by refusing to buy the dominant company's products and/or seek alternatives. There are always alternatives.

During the time this alleged "illegal activity" took place, computer sales were strong(er). What was driving that? The consumer.

For example, if Intel threatened their customers by withholding supplies if they ever bought any AMD chips, would you consider that OK?

Yes. In a free market with engaged consumers this arrangement would harm Intel more than it would AMD.

It's not fraud...
The customers could never get their chips from elsewhere because AMD would never have grown enough to supply them...
Intel could charge $2k for chips if they wanted...who could stop them?
Intel would get rich like crazy, but all of their customers would be greatly injured.

Intel would only get as rich as the consumer would allow.

"Change their business" in this case means get out of business. So you feel it's OK for one company to hold an entire sector to ransom?

It does not mean they have to get out of business. Vendors don't have to sell CPUs/motherboards to be a source for computer hardware. Computer manufacturers like Dell, HP, etc. are large and important enough customers for Intel and AMD that they have to be made happy.

There is no "holding ransom" here. The person/organization that eventually purchases the hardware has the ultimate power; to buy or not to buy.

If you claim caveat emptor, you must also be assured that it's possible to achieve for a reasonable average person...

It is possible to achieve for a reasonable average person. Many consumers didn't educate themselves or didn't understand what they were reading/hearing in this particular situation.. and most didn't care... but that doesn't mean it wasn't possible for them to make educated decisions.
 
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