Intel Being Sued By FTC As Expected
Of course everyone saw this coming after NY Attorney General Andrew Cuomo filed suit against them in November, but Intel can’t be feeling good this morning after the Federal Trade Commission (FTC) finally filed an antitrust lawsuit against them for engaging in what they’re calling anti-competitive practices.
In essence, it’s the same thing that Cuomo filed for NY state, saying that Intel’s practice of paying computer and laptop makers for using their chips rather than the processors of competitors such as AMD, to whom Intel paid $1.25 billion to settle that lawsuit, and got fined by the European Union $1.45 billion to settle their antitrust suit, but this one is big, and attacks differently.
The FTC isn’t looking for money; in other words, there’s little risk of a fine. Instead, if Intel is found guilty, Intel could be forced to give up its secrets to its competitors, which would mean someone out there would be making the same exact thing as Intel for a lot less money. At that point, even incentives to computer makers might be moot.
What’s fascinating is what you learn when you hear stories like this. For instance, it turns out there’s 5 FTC commissions who discuss, then vote on whether to act on these cases or not. In this case, the vote was 3-2, so it turns out not to be as much of a slam dunk as previously believed.
Intel’s position is that this case didn’t need to be filed because they’d been negotiating a settlement with the FTC, though talks had broken down. They also stated that not only will this cost millions of dollars to taxpayers for litigating the case (nice of them to think of us), but that it would restrict how they do business.
That’s kind of the point. I’m not going to beat up on Intel for their products, because most of us love Intel processors. But paying someone to buy your product seems, well, unseemly. As an example, in 2006, Dell earned $1.2 billion from Intel, while in one quarter in 2006, Dell made more money from Intel than they earned from from selling their own products. That’s just unheard of.
I wish those cashback ventures credit cards throw at us paid that well.