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Intel in Antitrust Trouble in Japan

samzenpus posted more than 9 years ago | from the big-and-illegal dept.

Intel 203

vincecate writes "The Japan Fair Trade Commission has ruled that Intel violated antitrust laws in Japan. Giving customers discounts based on the volume of your products they purchased is good business. However, Intel was adjusting customer discounts based on the volume of competing products they purchased, which is not legal. After the ruling, AMD responded saying, "We encourage governments around the globe to ensure that their markets are not being harmed as well". While Intel responded saying, "Intel continues to believe its business practices are both fair and lawful."

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203 comments

So carrots are legal, sticks are not (4, Interesting)

grandmofftarkin (49366) | more than 9 years ago | (#11898103)

In summary it looks like there is no problem encouraging people to use your product, it is only wrong if you threaten them when they consider using another companies product. Yes, this sounds pretty reasonable to me.

I know very little about law in this area. Is it the same in the U.S. and Europe? I would like to think it is but then considering today's climate I wouldn't be surprised if you it wasn't!

Oh regarding Intel's comment that it "... continues to believe its business practices are both fair and lawful.". It might just be legal in some countries but how is it fair to use your dominant position to prevent other companies from being able to compete with you? A statement like that is just a bare faced lie. If the situation was reversed you can bet Intel would kick up a fuss. I'm not saying I'm surprised it is just irritating.

Re:So carrots are legal, sticks are not (-1, Troll)

Anonymous Coward | more than 9 years ago | (#11898128)

why dont you stick a carrot in your ear and try and post something decent as a first post.
Something like 'FROST PIST' would have been better than that drivel.

DONT FORGET APRIL 1ST IS TROLL REUNITING DAY [slashdot.org]

Re:So carrots are legal, sticks are not (5, Insightful)

Anonymous Coward | more than 9 years ago | (#11898134)

Oh regarding Intel's comment that it "... continues to believe its business practices are both fair and lawful.". It might just be legal in some countries but how is it fair to use your dominant position to prevent other companies from being able to compete with you?

Statements like this are not meant to be factual. They are meant to influence opinions. "continues to believe" is a phrase that should warn you that a politician or a company is lying to you. Always replace it with "persists in claiming".

Re:So carrots are legal, sticks are not (0)

Anonymous Coward | more than 9 years ago | (#11898187)

Statements like this are not meant to be factual. They are meant to influence opinions. "continues to believe" is a phrase that should warn you that a politician or a company is lying to you. Always replace it with "persists in claiming".

Noooo, I just realized I foolishly accepted their presupposition that they have made similar claims before! There must be a hole in my tinfoil hat!

Re:So carrots are legal, sticks are not (0)

Anonymous Coward | more than 9 years ago | (#11898253)

But then again, after careful examination my tinfoil hat appears to be OK. I'll keep you posted about any further developments.

Re:So carrots are legal, sticks are not (2, Insightful)

Vince Mo'aluka (849715) | more than 9 years ago | (#11898193)

it is only wrong if you threaten them when they consider using another companies product

Of course, Intel did not actually threaten to initiate force against their customers (theft, fraud, extortion, murder, rape, etc). If they had, there would be no debate over the ruling. Intel only "threatened" to stop engaging in voluntary trade with their customers! Can you not see the difference here? Or were you deliberately trying to present the case as an actual threat of force?

The fact is that Intel's customers voluntarily chose to do business with Intel, and they can voluntarily choose to end that business relationship. Can Intel choose to end the business relationship, as long as they don't break any contracts? Why or why not?

I can and have "threatened" to quit doing business with online stores who tried to sell me damaged computer parts. Should I be charged with antitrust violations? Why or why not?

Disclaimer: Personally I am no fan of Intel, and I buy AMD whenever possible. But I know the difference between a voluntary business relationship and on which is based on force. This isn't the mob we're talking about.

Re:So carrots are legal, sticks are not (3, Insightful)

jackb_guppy (204733) | more than 9 years ago | (#11898277)

You are using Voluntary very loosely.

Intel when up from 78% to 89% of the market.

Now the bases is same as Microsoft did to PC here in the US; "If you sell the others products, we will NOT give you money".

What is large market share in your business, if you sell another's products, you loose money that makes you profitable.

That is MOB (as in the market) talking.

Re:So carrots are legal, sticks are not (1)

Vince Mo'aluka (849715) | more than 9 years ago | (#11898903)

The term "voluntary" cannot be used loosely: any interaction between two human beings MUST be one of either voluntary association or force. Moreover, the line between force and voluntary association is the only constant by which human beings can judge right from wrong -- anything else is inherently arbitrary by human nature. There are very few cases where the mode of a human interaction (voluntary or force) is up for debate, and these mostly involve young or mentally-handicapped individuals interacting with mature individuals.

Re:So carrots are legal, sticks are not (0)

Anonymous Coward | more than 9 years ago | (#11899005)

"Moreover, the line between force and voluntary association is the only constant by which human beings can judge right from wrong"

Um, no. False. This is a myth.

We don't get to define what is right or wrong. We only get to choose what we believe is right or wrong. If we are honest with ourselves the line between right and wrong is neither arbitrary, nor entirely based on force vs voluntary association.

Re:So carrots are legal, sticks are not (4, Insightful)

Qzukk (229616) | more than 9 years ago | (#11898320)

I can and have "threatened" to quit doing business with online stores who tried to sell me damaged computer parts. Should I be charged with antitrust violations? Why or why not?

Of course not, A) damaged goods are not an acceptable good and B) You're the buyer, you can do what you want anyway.

Now lets say you go to the computer store and the manager says "You own an AMD, so that video card in your hand will cost double" would you call that a fair trade practice? If they're the only computer store in the country?

Re:So carrots are legal, sticks are not (1, Insightful)

Vince Mo'aluka (849715) | more than 9 years ago | (#11898780)

You're the buyer, you can do what you want anyway.

Aha, so there's a double standard? If I'm reading this correctly, the buyer is entitled to voluntary association but the seller is not? Does this apply only to big business or would it apply to (for example) a private sale of a used car?

"You own an AMD, so that video card in your hand will cost double" would you call that a fair trade practice?

Sure, I'll put my money where my mouth is. Yes, that is fair business practice. Whether it's smart business is another matter, but fair, yes. Why is it fair? Because the transaction (or lack thereof) is still engaged voluntarily. Why is voluntary association fair? Because human nature says so.

If they're the only computer store in the country?

Not likely -- hell, impossible -- in a free market scenario, but I'll bite anyway: yes, it's still fair (I prefer the less-ambiguous term "voluntary"). Of course, Japan's economy is not a free market (neither is the US -- not even close), so there's a worm in the apple right from the start. (I define a free market as one in which government is authorized only to protect against force, not one in which government is authorized to be the aggressor itself, as in today's world.)

Re:So carrots are legal, sticks are not (0)

Anonymous Coward | more than 9 years ago | (#11899037)

One great fault in your assumptions (insofar as you use them in this current duscussion) is that force must be physical and immediate to count as force.

Intel would "force" the company out of business if they bought AMD.

I think that counts as force.

Re:So carrots are legal, sticks are not (3, Insightful)

bechthros (714240) | more than 9 years ago | (#11898664)

Economic coercion is still coercion. If Intel made better chips, they wouldn't need to cut off the competition's balls. If economic coercion becomes accepted as standard business practice, it will be VERY detrimental to marketplace competition (which is to say, competition based on the merit of the actual product and not consumer loyalty) and therefore VERY detrimental to real Capitalism.

Film at 11. [maxbarry.com]

Re:So carrots are legal, sticks are not (1)

Vince Mo'aluka (849715) | more than 9 years ago | (#11899008)

Economic coercion

Coercion requries aggression. Where is the aggression? Where is the theft, fraud, extortion, or physical force? All I see is voluntary association -- a threat to voluntarily end a voluntary relationship.

I think what you meant to say was "economic pressure". Coercion requires an act of force. You ought to just say what you really mean, instead of trying to justify it by re-defining voluntary association. I think what you really meant to say is that government knows better how to run a business than the business owners themselves, and therefore government should interfere by force.

Of course, Intel didn't achieve their market share entirely through voluntary association -- this is nearly impossible where a free market doesn't exist (and it doesn't, not even close). They exploited the force of government, just like any other business which operates in a non-free market. Once again, the root of the problem is government.

Re:So carrots are legal, sticks are not (3, Insightful)

qkslvrwolf (821489) | more than 9 years ago | (#11898853)

Of course, Intel did not actually threaten to initiate force against their customers (theft, fraud, extortion, murder, rape, etc). If they had, there would be no debate over the ruling. Intel only "threatened" to stop engaging in voluntary trade with their customers! Can you not see the difference here? Or were you deliberately trying to present the case as an actual threat of force? The fact is that Intel's customers voluntarily chose to do business with Intel, and they can voluntarily choose to end that business relationship. Can Intel choose to end the business relationship, as long as they don't break any contracts? Why or why not?
This is like saying that my boss could tell me that I have to have sex with them, or I lose my job. There is no violence being threatend; only a mutually "consenual" adult relationship. I volutarily took the job, right? Yes, I do view monopolistic practices as the free market equivilant of rape, and no, that doesn't make me wierd.

Re:So carrots are legal, sticks are not (0)

Anonymous Coward | more than 9 years ago | (#11898213)

There are a lot of companies that offer discounts for exclusivity. The customer usually gets the discount for running the risk of this company's product being outsold by another. In US, Dell ships only Intel PCs. I am sure that they have some kind of deal going on with Intel.

In my view, the discount is the price for exclusivity -- very much along the lines of a car dealer.

The whole dominant market position thing does not seem too good an argument for me. If it made price/performance/perception value to the customers, the competitor would be selling a lot more, the discount by the dominant player not withstanding. -- The dominant player is in that position for a reason.

This is different from what Microsoft did, by cross-subsidizing products. But, look at HP -- they are subsidizing PCs with profits from printers. IBM has historically sold PCs on a loss, either supported by enterprise systems profits, or by global services. All these practices are being considered bad, only when they are successful. It is very prevelant in industry.

Klerck ... dead at 22 (-1, Offtopic)

Anonymous Coward | more than 9 years ago | (#11898104)

I just heard some sad news on talk radio. Slashdot troll Kevin "Klerck" Ealy [legacy.com] was found dead in his Goose Creek, SC home this morning. There were no more details. Even if you didn't enjoy his homosexuality, [livejournal.com] there's no denying his contribution to Slashdot culture. Truly a troll icon.

What!? (5, Funny)

kunwon1 (795332) | more than 9 years ago | (#11898105)

Intel? Antitrust!? I don't believe it! I'd sooner believe that Linus Torvalds switched to a new OS!

Re:What!? (0)

Anonymous Coward | more than 9 years ago | (#11898155)

Sorry to disapoint you, but he hasn't. RTFA.

Re:What!? (1)

strider44 (650833) | more than 9 years ago | (#11898244)

lol, I wouldn't. You say that as if Linus doesn't still use linux.

Sheesh - I don't even know why that even got reported - Linus got a computer for free and he's actually using linux on it!

Hey Intel... (3, Interesting)

BackInIraq (862952) | more than 9 years ago | (#11898107)

...see that fine line between shrewd business practices and predatory, monopolistic racketeering?

See how you and Microsoft are on the same side of it?

That's a bad thing.

Re:Hey Intel... (4, Insightful)

Bralkein (685733) | more than 9 years ago | (#11898226)

Are you really surprised? Intel and all large corporations exist to make their organisation more valuable. They all push the law just as far as they think they can get away with... but this time, they judged wrong. I'd love to know about all of the dodgy shit that even fairly reputable organisations get up to, because I suspect there's an awful lot more of this stuff going on than your average person knows about.

I always think of it like this: they're not immoral, they're amoral. They just don't care about right or wrong, they can't afford to, because that's how the system works. I'm glad that they got caught, and I think we need much more government constraints put in place and have them actively enforced to prevent things like this from happening.

Of course, for that to happen, I'd need to buy myself a politician or two... and I'm only a poor student... care to give me a donation anyone? ;)

Bah ! (1)

Digital Warfare (746982) | more than 9 years ago | (#11898110)

Intel now know they are loosing the battle and are going down in shame....

Give me a rational reason why this is a problem? (0, Redundant)

Saven Marek (739395) | more than 9 years ago | (#11898112)

Can someone tell me honestly what's wrong here? Intel are the ones who have control over their product. They get to sell their products and define how much it sells for. Why are governments getting involved?

Obviously if a company is buying more of a competitor's products then they're buying less of yours, so your own are more expensive to them because they are buying in lower quantities. that is simple grade school economics.

Having governments butt their noses in like this only forces lowest commen denominators to win and means someone could come along and sell a piece of cheese as a CPU and anyone who tries to sell a real CPU could get labelled a monopoly.

Re:Give me a rational reason why this is a problem (5, Insightful)

dhbiker (863466) | more than 9 years ago | (#11898126)

I think you missed the point slightly, it goes something like this:

Intel: "if you buy 1 chip it costs $500"
Intel: "But if you buy 10 it costs $450 per chip"
Intel: "If company X wants to buy 10 then it will cost them $480 per chip because we found out they bought an athlon chip last week"

THAT is not on!!

Re:Give me a rational reason why this is a problem (1)

Hinhule (811436) | more than 9 years ago | (#11898132)

What I think was the case here was this.

2 vendors sell x amount of intel CPUs.

1 vendor only sells intel
1 vendor sells intel and another brand in equal amounts.

The intel only vendor gets a bigger discount.

Re:Give me a rational reason why this is a problem (1)

advocate_one (662832) | more than 9 years ago | (#11898145)

now we need to apply this reasoning to the case of Microsoft's unfair practices in regards to OEMS wanting to offer the choice of Linux or MS to the customer...

Re:Give me a rational reason why this is a problem (1)

aug24 (38229) | more than 9 years ago | (#11898188)

Mod you damned right! IMO this was the point where the DoJ dropped the ball. How the hell can that be acceptable?!

J.

Re:Give me a rational reason why this is a problem (1)

bechthros (714240) | more than 9 years ago | (#11898620)

Gee, surely it had nothing to do with Microsoft's $25,000 donation to the National Republican Congressional Committee, or their $867,000 in Republican campaign contributions [cnn.com] . Surely not. I mean, that would be bribery, right? Or would it be extortion on the part of the National Republican Congressional Committee, since they asked for (and by MS' own admission, probably received) another cool million on top of it? Nobody made a big stink about it at the time except some pesky "liberal media elites", so guess what? We all consented.

Amen. The DOJ folded miserably on that one. (0)

Anonymous Coward | more than 9 years ago | (#11898276)

Actually, given the monopoly power of Microsoft,
the justice department should have been able
to know what every OEM pays for Windows.


But even then Microsoft would reward the "good OEM"
through money transfers to banks in the some
country with friendly (to big business) banking
and fiscal habits.


Fuck Microsoft, here in Spain, an office license
for a Mac costs something like 700 euros!

Re:Give me a rational reason why this is a problem (1)

Richard_at_work (517087) | more than 9 years ago | (#11898288)

Microsoft doesnt charge a different Windows OEM price based on if the OEM wants to ship with alternative OSes, it just removes the option of OEM licenses altogether. This is perfectly legal (you are afterall allowed to not renew agreements as you feel fit and the OEM is free to purchase off the shelf at the same rates as anyone else) and isnt covered under this case at all.

Like that but different (4, Insightful)

MachDelta (704883) | more than 9 years ago | (#11898161)

Actually, from the way TFA explained it, it sounded a little more like this:

Company A and Company B buy 500 intel processors.
Intel goes back to those companies and says "Hey, we'll pay you money^H^H^H^H a 'rebate' - if you promise not to buy any AMD chips for a while."
Company A says "ok" and gets the cash, Company B tells them to go to hell, and doesn't get squat.

But who reads TFA around here? :P

Re:Like that but different (1)

t_allardyce (48447) | more than 9 years ago | (#11898208)

In a free trade economy that would be fine - Intel would just be buying a service from company A and that service would be the ignoring of AMD. However no economy works like that, governments want to keep things stable and predictable and so things like this are not legal, if this was allowed then there would be a sudden surge/snowball-effect in the market as everyone decided if they wanted to go with Intel and block AMD or go with AMD and loose profit on Intel, in the end there would be a good chance that AMD would have no customers, fire about 20,000 people and loose its value, which could have a knock-on effect on other businesses and everyone would be running around like headless chickens and scaring the government.

Re:Like that but different (1)

Hinhule (811436) | more than 9 years ago | (#11898210)

He wanted a reason I gave him the core reason, how they went about making sure the companies didn't buy the competitors chips is just details.

Re:Give me a rational reason why this is a problem (5, Informative)

BackInIraq (862952) | more than 9 years ago | (#11898142)

Can someone tell me honestly what's wrong here? Intel are the ones who have control over their product. They get to sell their products and define how much it sells for. Why are governments getting involved?

Obviously if a company is buying more of a competitor's products then they're buying less of yours, so your own are more expensive to them because they are buying in lower quantities. that is simple grade school economics."


The problem arises when somebody tries to use their position as the established leader to keep other companies from establishing a marketshare, thus using their dominance to maintain a monopoly. Not as much of a problem with Intel as it would be with a company like Microsoft (as AMD is a very strong competitor), but still not a good idea to let bad practices get started.

Again, basing your prices off how many of YOUR chips they buy is okay. What this alleges is taht they are also factoring in how many of the competitor's chips they buy, which is not. How many AMD chips a company buys is none of Intel's business, and shouldn't affect prices.

Simple example. Company A makes 100,000 computers, and uses Intel for 50,000 and AMD for 50,000. They should be charged the exact same rate as Company B, which makes only 50,000 computers but uses Intel for all of them. The accusation is that Intel would instead charge Company B a lower rate, because while they purchase the same volume they don't purchase any from AMD.

As somebody else said, the carrot is legal, the stick is not.

Re:Give me a rational reason why this is a problem (2, Informative)

Richard_at_work (517087) | more than 9 years ago | (#11898280)

Simple example. Company A makes 100,000 computers, and uses Intel for 50,000 and AMD for 50,000. They should be charged the exact same rate as Company B, which makes only 50,000 computers but uses Intel for all of them.

Close but no. Intel shouldnt charge Company A the same as Company B for the same 50,000 units. Intel *should* charge Company A the same for those 50,000 units as they would if they didnt know about the 50,000 AMD units. Bit of a difference.

Intel is well within its rights to charge Company A and Company B different prices, but NOT for certain anticompetative reasons. Its the same as Intel refusing someone business - they can refuse anyone business but NOT for reasons like race, gender etc.

Re:Give me a rational reason why this is a problem (4, Interesting)

orlinius (181137) | more than 9 years ago | (#11898457)

I'm not surprised at all that Intel has such practices with its customers.

Two years ago, in the company I worked for, we needed to buy 600 cheap servers from Dell for an embedded application that we had to install at our clients. The price was really very important. If we couldn't get them at the right price, our project was not going to make it.

Dell did everything to lower the price. I remember they went down as much as 50% but it was still not enough.

We were about to cut the project when Dell called us and told us that the only way to reduce the price of the 600 servers further was if we signed some sort of paper saying that we used AMD processors in our previous project and this was a replacement project. This way they could get a big rebate from Intel under a certain program provided by Intel.

I just couldn't believe that Intel was ready to go that far...

Re:Give me a rational reason why this is a problem (0)

Anonymous Coward | more than 9 years ago | (#11898638)

In other words you're essentially subsidising your own customers switching to another product, and aren't allowed to give bonuses to loyal customers.

That is such stupid thinking no wonder the economy is down the drain.

Re:Give me a rational reason why this is a problem (2, Informative)

aug24 (38229) | more than 9 years ago | (#11898148)

Dear God, could you at least skim the F article before posting?

They gave their customers lower prices if they guaranteed not to buy their rival's chips. To my mind, that is unfair.

Justin.

Re:Give me a rational reason why this is a problem (2, Informative)

TheRealSync (701599) | more than 9 years ago | (#11898156)

Obviously if a company is buying more of a competitor's products then they're buying less of yours

Okay, I'll try explaining this in easier terms.

Intel to customer: "If you buy 1 of these, it will cost you 100$, if you buy 10, you will get them for 50$ each".

So far, it's fair enough.

Intel to customer: "However, for each product you buy from AMD we will lower our discount. Buy one single item, and our product will cost you 60$, even if you buy 10 of them."
Now, this is unfair, since the customer would buy 10 of whatever it was from Intel nomatter how many he might buy from AMD. See the difference?

Re:Give me a rational reason why this is a problem (1)

LousyPhreak (550591) | more than 9 years ago | (#11898158)

its easy: Intel Pentium 4 530 3.00GHz: 176 imagine you and me we are both retailers. i buy 1000 of them, get them for 100k . you buy exactly the same 1000 but get them for 150k . why? because you also sell amd stuff. still think everythings working right?

Bulls**t (2, Insightful)

gomel (527311) | more than 9 years ago | (#11898164)

The role of anti-trust legislation is the protection of consumer choice. Intel's discount was directly targeted to prevent an alternative.

Monopolies are bad, irregardless of whether they are owned by the state or privately. People living under communism had no choice, too. All they had was one-two products from one state-owned monopoly.

BTW, I assume that people are able to distinguish between cheese and CPUs on their own.

Re:Bulls**t (1)

Bobas (581631) | more than 9 years ago | (#11898191)

Monopolies are *not* illegal. Its their abuse that is. Say if you sell stuff A, that competes with other dealer's stuff B, and everyone buys A (because its a better product) - you would get a monopoly even if you didn't reach for it.

Re:Bulls**t (0, Redundant)

R.Caley (126968) | more than 9 years ago | (#11898237)

Monopolies are bad[...]

If there is only one grocer in your town selling adulterated flour, while all the rest are selling quality stuff, he has a monopoly on adulterated flour. Is that a bad thing? Would your life be improved if some of the others moved into the adulteration business?

Re:Give me a rational reason why this is a problem (2, Insightful)

R.Caley (126968) | more than 9 years ago | (#11898171)

Obviously if a company is buying more of a competitor's products then they're buying less of yours, so your own are more expensive to them because they are buying in lower quantities.

But, if you read the article, that is not what was happening.

Rather, the scheme was that if I was buying 1,000,000 intel chips, and you were buying 1,000,000 intel chips plus 500,000 AMD chips, my intel chips would be cheaper. Ie it is not an issue of bulk discounts, but rather of bribes not to buy anything from AMD.

Now, pure free market theory would say this is fine, evenetually Intel will run out of money and the 10th firm to be built on the ashes of AMD will win out. However, that could take 50 years or perhaps longer than the integrated circuit industry will exist for. Anti-monopoly laws exist on the theory that a small distortion of the free market to speed up that attrition process and maintain some competition now is a general win.

Re:Give me a rational reason why this is a problem (0)

gordo3000 (785698) | more than 9 years ago | (#11898461)

market theory doesn't predict anything like that. Well, unless you are assuming perfect information(everyone knows this is going on) and that all products are homogenous and that no company has market power because we are in a perfectly competitive environment. A bit of a stretch, don't you think?

Re:Give me a rational reason why this is a problem (2, Insightful)

R.Caley (126968) | more than 9 years ago | (#11898643)

Well, unless you are assuming perfect information[...]and that no company has market power

No, that's the point, market power costs money to excercise (eg Intel has to pay people not to buy AMD, or keep it's prices below reasonable cost plu margin or whatever), so given a perfectly stable open market etc. etc. eventually the little guys who keep nipping at the monopolist's ankles will bring it down.

Unfortunatly, in the real world, there are barriers to entry, especially international ones and the world changes under us. And, of course, economic theories tend to assume agents in the market behave rationally, which we know is bollocks.

Re:Give me a rational reason why this is a problem (1, Informative)

mar1boro (189737) | more than 9 years ago | (#11898174)

"Obviously if a company is buying more of a competitor's products then they're buying less of yours, so your own are more expensive to them because they are buying in lower quantities. that is simple grade school economics."

Volume discounts are fine. The problem occurs not when you say "Buy more than 5,000 of my widgets and you get a discount. Buy less and you don't." The problem is when you say "If the number of my widgets in your shop drops below %80 of your total I will cancel the discount." Attempting to coerce your vender to not carry your competitors' widgets is anti-competative.

Re:Give me a rational reason why this is a problem (0)

BackInIraq (862952) | more than 9 years ago | (#11898197)

"...someone could come along and sell a piece of cheese as a CPU..."

Cyrix is still making processors?

Sorry, that's actually an insult to most of the better cheeses.

And I'm allowed to bash Cyrix...I actually owned one of their processors once (hanging head in shame now).

Re:Give me a rational reason why this is a problem (1)

goatan (673464) | more than 9 years ago | (#11898232)

Having governments butt their noses in like this only forces lowest commen denominators to win and means someone could come along and sell a piece of cheese as a CPU and anyone who tries to sell a real CPU could get labelled a monopoly.

umm no because those "bad and evil" governments would also but in in this case for false advertising.

Either goverments stay uninvolved with business practice as you wish and companys are allowed to charge what they want, strongarm who they want and sell cheese as CPU's or you have a regulated system were there are laws against strongarm tactics and selling fakes. I.E. cheese as CPU's ETC.

Re:Give me a rational reason why this is a problem (3, Insightful)

meburke (736645) | more than 9 years ago | (#11898644)

It's a problem because it's an American company doing business in Japan. Japanese companies do it all the time in foreign countries. NEC especially carved a niche by matching competitive prices (in the form of discounts and rebates) against IBM among large businesses that had a large number of IBM PC's. Once a big company like AMOCO started buying NEC desktops, they moved on to printers, etc. The program where they would give a rebate or discount when a customer traded in a competitive PC was effective for a while in the late '90's.

Of course, this wouldn't happen in Japan. Japanese keiretsu have pretty well divided up the Japanese business market satifactorily. Trying to skate a Japanese business away from an established vendor is considered socially deplorable. It's done, but very subtly, so it doesn't look like the computer company is establishing inroads in the competitor's market. In the US, their "cooperation" would be considered "collusion" and "price fixing".

Wanna read a cool book? "The Asian Mind Game" by Chin-Ning Chu explains a lot about the roots of Asian competitiveness and difference in ethical guidelines vis a vis The US and other occidental cultures. It will change the way you view Asian politics and business.

This attack on Intel may not even be aimed at Intel as much as laying the groundwork for an attack on Apple (which is actually doing OK against Sony in Japan) or the introduction of a Fujitsu replacement for the Intel chips a couple of years from now.

Standard PR response (5, Insightful)

Anonymous Coward | more than 9 years ago | (#11898113)

While Intel responded saying, "Intel continues to believe its business practices are both fair and lawful."

That's how PR hacks are taught to respond. When, for example, your CEO is stealing money, your PRish role is to go out and with a straight face say: "The core Value of our company is Honesty. We will introduce a Business Codex to emphasize our commitment."

Obligatory (1, Funny)

m50d (797211) | more than 9 years ago | (#11898118)

Computer manufacturers are already being sued in anti-trust cases...in Ja- oh, never mind

It seems a bit harsh (2, Insightful)

Phidoux (705500) | more than 9 years ago | (#11898119)

but then again, if Intel wants to do business in Japan, I guess they should also abide by the rules. I'm sure AMD are happy.

Re:It seems a bit harsh (0)

Anonymous Coward | more than 9 years ago | (#11898650)

It seems a bit harsh?

So if Microsoft started charging your company double for Windows licences because they'd found out that you had a Mac on the premises, you'd be OK with that right?

Woo! (5, Funny)

Anonymous Coward | more than 9 years ago | (#11898125)

Does this mean that we get to start referring to Intel as a "convicted monopolist" in every /. article about the company, just like we do for Micro$oft??

That's awesome!

Re:Woo! (0)

Anonymous Coward | more than 9 years ago | (#11898173)

So which judge convicted them, hmm? Hmmm? Hmmmmmm?

Gee, how about... (1)

gosand (234100) | more than 9 years ago | (#11898786)

Does this mean that we get to start referring to Intel as a "convicted monopolist" in every /. article about the company, just like we do for Micro$oft?? That's awesome!

Hmm. Maybe Slashot can run a contest to come up with something we can place in their name that is as annoying as the dollar sign in "Micro$oft". How about "Intel In$ide"? No, that is a slogan - er - $logan. Anyone else?

Re:Gee, how about... (1)

DShard (159067) | more than 9 years ago | (#11898939)

Int€l?

Intel in Antitrust trouble... in Japan! (3, Funny)

Anonymous Coward | more than 9 years ago | (#11898136)

Intel in Antitrust trouble... in Japan!

The meme works.

Yes it does (0)

Anonymous Coward | more than 9 years ago | (#11898286)

Some memes only work... in Japan!

Guess they just didn't know. (0)

NoMercy (105420) | more than 9 years ago | (#11898141)

Ignorance isn't an excuse, but we do live in a world where if you pick up a catalog to order things, there's a price for 1-25, a price for 25-50 and a price for 100+, the more you buy the cheeper you get what you want.

Kinda a fundamental principle of the wholesale system, I can see how it would cause companies to keep the extra money off and not drop there intel orders and buy alternative parts, but then intel prices are rather high to start with, switching to most things would probably not cost much.

Re:Guess they just didn't know. (1)

dkf (304284) | more than 9 years ago | (#11898176)

There's no problem for anyone with offering cheaper prices for people who buy larger quantities of your own product (as long as you're allowing anyone who buys in those quantities to get those prices, of course). But that's nothing to do with the case reported. Offering cheaper prices to people who buy larger quantities of a competing product is wrong.

Re:Guess they just didn't know. (1)

Jedi Alec (258881) | more than 9 years ago | (#11898225)

Offering cheaper prices to people who buy larger quantities of a competing product is wrong.


Not to mention stupid ;-) So if I buy my Athlons in bulk i can get cheap Celerons? Point's valid tho, but the other way around.

Guess you didn't RTFA (1, Informative)

Anonymous Coward | more than 9 years ago | (#11898177)

Intel giving discounts based on volume is not the issue, but Intel adjusting customer discounts based on the volume of competing products they purchased is the issue.

Re:Guess they just didn't know. (2, Interesting)

eric76 (679787) | more than 9 years ago | (#11898206)

we do live in a world where if you pick up a catalog to order things, there's a price for 1-25, a price for 25-50 and a price for 100+, the more you buy the cheeper you get what you want.

More to the point, we don't live in a world where one usually sees the price depend on how few of the competitor's product you bought instead of how many you bought from them.

For what it's worth, there have been rare occasions when buying more of an item might lead to higher per unit prices.

One example involved Sony when they first started out. According to an article in one of the business journals about 20 years ago (I think it was Forbes), when Sony showed their transistor radios to one big chain, the chain asked for many more radios than Sony expected. The price Sony quoted was higher per radio than the price they quoted for a much smaller quantity of radios. The buyer from the chain was very surprised and asked why. Sony said that with an order that big, they would have to build a bigger factory to produce them and they would have to earn enough to help pay for additional production capability.

Re:Guess they just didn't know. (1)

GigsVT (208848) | more than 9 years ago | (#11898387)

Yeah, in those cases you are buying quantities that affect demand on the level of an entire market.

It's just like buying a ton of a thinly traded penny stock. You could easily cause the price to double or triple.

Re:Guess they just didn't know. (1)

Tsu Dho Nimh (663417) | more than 9 years ago | (#11898259)

"but we do live in a world where if you pick up a catalog to order things, there's a price for 1-25, a price for 25-50 and a price for 100+, the more you buy the cheeper you get what you want."

Yes, discounts for quantity happen, and are legal ... but what if the owners of Catalog "A" charged you more for your 100 widgets than they charged me for the 100 I bought, just because you also bought widgets from Catalog "B". That is not only unfair pricing, it is an attack on "B".

Japan has no problem with the quantity discounts, but they are justifiably annoyed that Intel appears to have two prices for the same quantity of chips - one for Intel-only customers and one for customers who also buy AMD chips.

I See What's Happening Here (2, Interesting)

flopsy mopsalon (635863) | more than 9 years ago | (#11898168)

Clearly, Intel has been trying to take advantage of the weak dollar to expand its market in Japan, and the ever-watchful Japanese regulatory agencies moved to stymie foreign intrusion into one of their most tightly protected markets [clari.net] .

Looks to me like this could be the opening salvo of a new trade war. I just hope it doesn't affect the price of ramen.

Re:I See What's Happening Here (1)

gordo3000 (785698) | more than 9 years ago | (#11898492)

except Intel is almost completely dominant in Japan and this doesn't go against the number 2 maker in the US, AMD. Even if the weak dollar could be blamed, it wouldn't make much sense to 'protect' Japanese businesses in an area which those businesses don't exist.

Has nothing to do with the dollar (1)

salemlb (857652) | more than 9 years ago | (#11898563)

How did you decide that this has to do with Japan protecting its markets (from what? If US companies can't sell processors to Japan, where will they go for chips to drive their computers? Toshiba?)?

1. Intel was not dominating Japan. AMD was doing ok there.
2. Intel suddenly beats the snot out of AMD in Japan
3. Japan investigates, for some reason, learns that Intel was raising the price of Intel processors sold to any company that also bought from AMD
4. Investigation hits the press/slashdot.

Read the article... heck just skim the article for years. This started way back before the dollar was weak. Like, when the dollar was really really strong. Unless Intel has invented time travel, the price of the dollar has less to do with this investigation than the price of eggs in China.

I wonder, though... if Intel was doing this same thing with Dell. Might explain why Dell won't leave Intel... at all. Even though the Opteron has lately been a better product, and one for which there is significant demand.

Last sentence was edited out by slashdot editors (4, Interesting)

vincecate (741268) | more than 9 years ago | (#11898179)

But if Intel really believes this is "fair and lawful", why is it that Intel does not use written contracts for these deals? [asahi.com]

Antitrust intel? (2, Interesting)

vidarlo (134906) | more than 9 years ago | (#11898189)

IANAL, but I thought that to be in a antithrust situation, you had to be barring others from market, and also have a significant market share (i.e more than 80%)

In the case of Intel, the consumer has a real choice, in AMD for home pc's, and POWER or AMD for servers. So as long as there is a real choice, there is competition, and IMO, there is very hard competition between Intel and AMD. So I think it's strange that Japan focuses those over Microsoft or other monopoles that is less challenged.

Did you RTFA ? (0)

Anonymous Coward | more than 9 years ago | (#11898805)

Quote 1:
Japan's competition monitor yesterday found that Intel, the world's leading chipmaker, had violated antitrust laws by attempting to dissuade personal computer makers from using its rivals' microprocessor chips.


The Japan Fair Trade Commission (JFTC) said Intel's Japanese subsidiary had stifled competition by offering rebates to five Japanese PC makers on condition they agreed either to limit purchases of chips made by rivals Advanced Micro Devices (AMD) and Transmeta.


Quote B:
Intel, with more than 80 per cent of the global chip market, has long faced antitrust scrutiny from both the US and Europe.


The consumer does not have a choice if the manufacturer doesn't supply one... Go buy an Athlon or POWER system from Dell. Sure, they aren't the only store on the block, but since they sell the most computers, they get the best deals from the parts manufacturers, and generally have lower prices.

Or, go buy a Linux (or no-OS) computer from Dell... They tend to cost MORE than the same config WITH Windows. They claim, it's because a non-Windows computer is a "special order".

What's missing the from Intel statement (4, Insightful)

Laurentiu (830504) | more than 9 years ago | (#11898196)

"Intel continues to believe its business practices are both fair and lawful ,in spite of all evidence to the contrary."

If they keep on going like that, pretty soon we'll have Intel turn into a religion.

Re:What's missing the from Intel statement (0)

Anonymous Coward | more than 9 years ago | (#11898219)

the {==} from. you dyslexic, mate?

Re:What's missing the from Intel statement (0)

Anonymous Coward | more than 9 years ago | (#11898360)

I'm seriously having trouble comprehending that post, Mr. AC. Would you care to explain what the hell you see wrong with the one you're replying to?

Re:What's missing the from Intel statement (0)

Anonymous Coward | more than 9 years ago | (#11898469)

Elementary, dear AC. It's a matter of "subject".

Re:What's missing the from Intel statement (1, Interesting)

Anonymous Coward | more than 9 years ago | (#11898383)

If they keep on going like that, pretty soon we'll have Intel turn into a religion.

Intel already is a religion. How else do you explain the fact that they still have a majority market share, even though AMD chips have been both faster and cheaper for about a decade now?

Also, a nitpicking semantic point... the characteristic of a religion is that it believes things for which there is no evidence, not things that there is evidence against. The existence of a god, for example, can neither be proven nor disproven. Therefore, belief in a god is religious. On the other hand, it can be proven that the earth is not flat; therefore belief in a flat earth is not religious, it's just plain wrong.

How do they know? (2, Interesting)

TLLOTS (827806) | more than 9 years ago | (#11898212)

On the whole this does seem like a rather gross abuse of Intel, a company I have previously supported, well not so much supported but remained indifferent towards. However this pricing scheme seems rather off, not just in fairness, but how in the world would they be aware of the volume of a competing product that a company has purchased? Perhaps there's something simple I'm missing (more than likely) but I don't see any realistic reason why Intel would know extensive information about such things, though I'm sure they'd want to know. Anyone care to enlighten me?

Re:How do they know? (1)

karnal (22275) | more than 9 years ago | (#11898976)

Every company that has a product to market has a competitor. Said company always does extensive research on competitors to see what they're doing.

It would not suprise me in the least that Intel knows where AMD is at, and AMD knows where Intel is at. It just makes good business sense; if not only to try to grow into areas where your competitor does well.

The company I work for has a pretty decent research staff that investigates "competitors". You need to try to stay one step ahead of the game; being blindsided by things that your competitors do is not a good way to run a business.

wishful thinking... (0)

Anonymous Coward | more than 9 years ago | (#11898215)

Now, if only this same logic would be applied to OS market... around the world. With actually putting up serious enogh sanctions for you-know-who...

Yeah, I know it's not gonna happen. And no, I'm not paying for those tissues you're using to clean up your pants.

And I believe... (1)

Mr. Flibble (12943) | more than 9 years ago | (#11898221)

Intel continues to believe its business practices are both fair and lawful.

And I believe my actions are both fair and lawful... Now, to go rob that bank...

I'll give you an example... (5, Funny)

jpiggot (800494) | more than 9 years ago | (#11898236)

Some people seem to be confused; let me help to explain. If I liked listening to "Pennywise" and bought all their CD's, and Ashley Simpson found out about it and charged me EXTRA to purchase her limited edition concert DVD with bonus interviews, AND if we both lived in Japan...I'd legally be allowed to force her to commit suicide in the town square. With a kitchen knife.

It's a rich and vibrant culture those Japanese have, I tell you.

Dell and AMD (4, Interesting)

Anonymous Coward | more than 9 years ago | (#11898255)

Could it be for a similar reason that Dell reinstated that they will stick to Intel chips despite the lead of AMD in 64 bit processors.

I mean the Intel CEO called Dell's CEO and said: "If you offer a single system with AMD processors we'll raise the prices on our stuff". Of course both will deny.

I strongly suspect something like this: in big business relationships, you can never be paranoid enough. The reality is much worse than anything that most people could start to imagine.

For example, AMD has been the only source for mobile 64 bit processors for quite some time. But Intel can prevent Dell from entering the market until they are ready, and maybe also pressuring Microsoft in the same direction, so that both Dell 64 bit portables and 64 bit Windows will be available only when Intel has all 3 catergories (mobile, desktop and servers) covered.

Re:Dell and AMD (0)

Anonymous Coward | more than 9 years ago | (#11898278)

I mean the Intel CEO called Dell's CEO and said: "If you offer a single system with AMD processors we'll raise the prices on our stuff".

Put it the other way around:

Intel CEO calls Dell CEO and says "If you sell our chips exclusively we'll give you a discount."

Now that doesn't sound so unfair, does it?

antitrust principles commonly accepted worldwide (1)

sl4shd0rk (755837) | more than 9 years ago | (#11898257)

..(from tfa) So just what type of antitrust principles are accepted? I would have to say acceptance has nothing to do with forcing-it-down-your-throat, other than accepting the fact your being screwed.

cmp [Intel+AMD],[Microsoft+Linux] (2, Interesting)

Quentusrex (866560) | more than 9 years ago | (#11898262)

Intel's actions would be like Microsoft selling you the install CD's which scan you computer for linux. If it finds Linux you would have to enter a 'special' serial number that would of course cost you more than the 'standard' serial you purchased with the install disks.

Re:cmp [Intel+AMD],[Microsoft+Linux] (1)

GigsVT (208848) | more than 9 years ago | (#11898413)

Microsoft accomplishes this through technical means, such as always overwriting the boot area making linux unavailable as a boot option, if you install Windows after Linux, thus causing people with both OSs to face a more problematic install.

Things like that.

Re:cmp [Intel+AMD],[Microsoft+Linux] (1)

Quentusrex (866560) | more than 9 years ago | (#11898466)

No, you either format the whole hard drive and install Microsoft first then linux. Or you just save the first partition for microsoft, install linux, install microsoft. then boot up in knoppix and repair the boot sector. I have done both methods successfully on my home test networks.

Better still ... (0)

Anonymous Coward | more than 9 years ago | (#11898697)

better still, you answer the Linux installer's question "Do you really want to erase all Windoze partitions?" with DEFINATELY YES!

Campaign Contibutions (1)

datadriven (699893) | more than 9 years ago | (#11898321)

If they get in to trouble in the US they could make campaign contibutions to a candidate that will let them off the hook. It worked for Microsoft.

Yeah... (1)

adyus (678739) | more than 9 years ago | (#11898325)

In other news, rapists take pride in practicing safe sex...

Intel continues to believe... (3, Funny)

bani (467531) | more than 9 years ago | (#11898362)

...that the itanium is a wildly successful product, too.

in other news, intel continues to believe the f00f and pentium fdiv bugs were really just user error...

Sick minds running corporations (2, Insightful)

Anonymous Coward | more than 9 years ago | (#11898425)

"Intel continues to believe its business practices are both fair and lawful."

After doing what Intel did, I can't believe someone would say this with a straight face. What a world we live in.

I get it...but.... (0)

Anonymous Coward | more than 9 years ago | (#11898617)

Aren't these discount structures really the same? Each organization really has a limited amount of CPUs they are going to purchase. To say I am going to give you a discount based on quantity is normal. If you buy from a competitor, that quantity is less, therefore, your discount is less, you pay more. Seems one and the same to me, really.

Also, this is business norm, by the way, in every single software sales organization I have worked for.

Replace REBATE with BRIBE (2, Insightful)

lcsjk (143581) | more than 9 years ago | (#11898663)

Consider this, "If you buy 100,000 of our product your price will be $1,000,000 for the lot. However if you agree to buy fewer or none of the competing AMD product, we will sell you the lot for $900,000."

Companies set their real prices based on the manufacturing cost of the product and the profit they must make on each to stay in business. Their sell price is NOT supposed to be based on whether the the buyer is also obtaining products from a competitor. Giving rebates or discounts based no that principle is similar to a bribe, and is illegal nearly everywhere [unless you are receiving the bribe ;) ].

Counter Justice (2, Interesting)

Doc Ruby (173196) | more than 9 years ago | (#11898778)

A corporation breaks the law, is found liable, and is forced to pay damages. It complies, but it makes public statements that "we did no wrong". It is therefore claiming it is complying solely due to government blackmail, intimidation: "we're complying because otherwise we might get shut down, or maybe be put in a government cage". Justice is dismised as irrelevant. People have the right to criticized the government, to disagree with it. But where does a corporation's "right" to "free speech" end, and sedition, work to undermine the government and its authority, begin? Corporations already get to use the government judicial system, subsidized by taxpayers, to do much of their most difficult negotiation work. And usually settle before judgement, cheating the public of any benefit from a precedent in the settlement. Why do we allow them to use and abuse our expensive justice system - and work steadily to diminish it, in favor of a power vacuum into which corporate power can easily move?

Intel policy vs bad-salesman? (1)

redelm (54142) | more than 9 years ago | (#11898974)

AMD has complained before. And probably cot minimal investigation:

[Intel to cop]: "Oh no, we would never do that." Case closed.

This time some [brave?] Japanese company probably complained to MITI and produced documents that showed their discountwas dependant on %Intel, not just volume Intel.

Japanese law may permit the whistleblower to remain anonymous. US law probably wouldn't. I doubt even Dell could risk Intel's retaliation.

Has Intel has gone to the Dark Side? or is this an isolated bad-saleman case? It isn't certain, although Intel remains responsible for it's bad salesmen.

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