It is the first blow for the processor giant. The U.S. Federal Trade Commission (FTC), which supervises free trade in the U.S., announced that it was launching a formal antitrust investigation against Intel. The stakes are high for both Intel and AMD; the total market for microprocessors racked up $225 billion in sales last year.
I can here the cheer at the AMD Headquarters and so do I. Yes I am an AMD Freak. Intel's Nehalem has been bothering AMD since its release and also the recent lost battles against Intel are a big wound in AMD.
The announcement has turned to be the much sought medicine to get AMD ready for the next battle. Both the companies have spends have spend tens of millions of $$$ in Legal issues and PR.
William E. Kovacic, the new chairman of the trade commission, the successor of Deborah P. Majoras, with the backing of some of the fellow commissioners has drawn first blood !! Majoras was a more lenient appointee, and helped work out the antitrust settlement in 2001 with Microsoft. D. Bruce Sewell, Intel’s senior vice president and general counsel, says that the U.S. antitrust laws are different than European ones, and it will not be charged. Intel is planning on racking up its Capitol Hill efforts, though, likely in the form of lobbyist dollars.
AMD's top executives expressed their pleasure over the Commission's decision. Tom McCoy, executive vice president for legal affairs at AMD, stated, "Intel must now answer to the Federal Trade Commission, which is the appropriate way to determine the impact of Intel practices on U.S. consumers and technology businesses. In every country around the world where Intel’s business practices have been investigated, including the decision by South Korea this week, antitrust regulators have taken action."
The largest U.S. antitrust investigation since the Microsoft one of the 90s came the same week as more good news for AMD; Korean officials slammed Intel with a $25 million fine for violating its fair trade laws. The Korean officials discovered that Intel illegally paid Samsung Electronics and the Trigem Company $37 million in payments between 2002 and 2005 to not buy AMD processors. The European Union's European Commission (EC), which charged Intel with "the aim of excluding its main rival from the market" is expected to expand its charges this year.
Intel currently owns somewhere between 80 to 90 percent of the worldwide microprocessor market. Many U.S. citizens do not realize that U.S. laws do allow monopolies, unlike elsewhere, but forbid companies with a monopoly from using its dominance to restrict competition.
With mounting evidence worldwide, Intel faces a tough case before the FTC. However, it will likely do what it takes, or perhaps more aptly write the lobbyist checks needed to prevent it from becoming the next Microsoft. Meanwhile, AMD will also likely step up its efforts in hopes that it can stop its downhill slide by a court victory over Intel