Sign in with
Sign up | Sign in

Intel Accused of Giving Dell $6 Billion in Perks

By - Source: Tom's Hardware US | B 73 comments

Intel is accused of giving PC makers substantial amounts of money in exchange for exclusivity.

The State of New York has filed a lawsuit against Intel accusing the chipmaker of paying vendors billions of dollars in rebates to not use AMD chips. Xbitlabs reports that IBM, Dell and HP are among the companies that received rebates, with Dell receiving roughly $6 billion over five years.

According to lawsuit, Dell was paid rebates based on how many CPUs it bought. Xbit reports that the percentage of the rebate could fluctuate and it reached 16 percent while Dell contemplated using AMD chips. Dell allegedly received $6 billion dollars between 2002 and 2007 and the Wall Street Journal reports that these payments sometimes exceeded Dell's profits with payments for one fiscal quarter constituting 116 percent of Dell's reported net income.

The news following an EU decision to impose hefty fines upon Intel for anticompetitive practices. Intel offered similar rebates in the European market and paid vendors to delay or cancel the launch of AMD products. The European Union fined the company €3.45 billion in May of this year.

Display 73 Comments.
This thread is closed for comments
Top Comments
  • 28 Hide
    Parsian , November 6, 2009 5:13 PM
    Suffer Intel, you don't deserve where you are. When AMD was ahead in performance, they werent gaining anything because Intel's practices.
  • 26 Hide
    BoxBabaX , November 6, 2009 5:09 PM
    Wow, this looks very bad for Intel.
  • 24 Hide
    ominous prime , November 6, 2009 5:22 PM
    Wow, talk about shady business practices.
Other Comments
  • 26 Hide
    BoxBabaX , November 6, 2009 5:09 PM
    Wow, this looks very bad for Intel.
  • 22 Hide
    nforce4max , November 6, 2009 5:12 PM
    That explains the flood of Pentium4s that so saturated the PC market and is impossible to avoid unless you only work on macs.
  • 28 Hide
    Parsian , November 6, 2009 5:13 PM
    Suffer Intel, you don't deserve where you are. When AMD was ahead in performance, they werent gaining anything because Intel's practices.
  • 9 Hide
    war2k9 , November 6, 2009 5:16 PM
    Dell should thank Intel for the money.
  • 20 Hide
    cruiseoveride , November 6, 2009 5:21 PM
    We all know Intel is Evil
  • 24 Hide
    ominous prime , November 6, 2009 5:22 PM
    Wow, talk about shady business practices.
  • 22 Hide
    830hobbes , November 6, 2009 5:23 PM
    NICE! I'm no AMD fanboy, just a gamer who likes good competition to lower prices. Also, as an AMD stockholder this is awesome. Intel is ridiculous with this shit.
  • 13 Hide
    hellwig , November 6, 2009 5:26 PM
    Was it Tuan that tried defending this practice? Something about how its the OEMs choice what processors to use in their computers? Funny, it seems the government agrees with us consumers, that its out choice what processors we want to use, and that its illegal for Intel to basically buy off the OEMs, preventing their competitor from reaching market int he first place.

    Of course, it doesn't seem like Intel cares one way or another, they already got busted for this in the first place in the 90's, which led to AMD keeping their x86 license permanently. Maybe this time AMD gets free license to the latest Nehalim tech too.
  • 18 Hide
    tipoo , November 6, 2009 5:28 PM
    Apple STILL uses exclusively Intel chips across their entire lineup. Whats with that?
  • -8 Hide
    7amood , November 6, 2009 5:28 PM
    since there is not much competition form AMD, I hope they won't try to get the 6Bs back from us in the coming years.
  • 10 Hide
    uberlaff , November 6, 2009 5:32 PM
    Damn... I'll start selling Intel PC's if they pay me more than I'm actually making on the PC's!
  • -3 Hide
    soky602 , November 6, 2009 5:39 PM
    If only people would think of it as buy one get one or its 50% off a bundle deal on this item, it won't sound so bad.
  • 19 Hide
    bill gates is your daddy , November 6, 2009 5:40 PM
    $6 billion paid out over 5 years. $1.2 billion per year. Are you catching that? $1.2 BILLION a year. All the lying and manipulating and monopolizing and any other corporate nastiness that Intel wallows in they still were able to give away $1.2 billion dollars every year.

    Show of hands…who here still believes that the i7-975 Extreme Edition is worth $1000??? Any hands? How much is Intel marking up to cover $1.2 billion in bribes? 100%? 200%? 500%??? Who really knows.

    They should go around to all the companies that accepted the bribe and take out $6 billion then head over to Intel and take out another $6 billion then drive it over to AMD and leave $12 billion on their doorstep with a note that says “have fun!”

    I was talking myself into purchasing Intel for some machines I was about to build but I clearly see me purchasing AMD all the way.
  • 17 Hide
    megamanx00 , November 6, 2009 5:41 PM
    Can't say I'm really surprised. Giving a partner incentives for selling so much is one thing, but giving them incentives, especially big ones, to not use a competitors product is an anti trust issue, especially when you're a monopoly.
  • 1 Hide
    tester24 , November 6, 2009 5:41 PM
    landerx74This is retarded! You could also say Intel gave Dell reabtes for buying more chips! BIG DEAL! How is that different than a retailer saying buy 1 get 1 free or buy 2 and get 10% off. AMD could have done the same thing.


    It's called incentive, saying "hey you buy more of my chips you can get X% discount and sell them at the same price and make a lot more $"

    AMD couldn't do this because Intel has polluted the market with their chips so AMD couldn't even get a foothold.
  • 0 Hide
    nekatreven , November 6, 2009 5:44 PM
    I hate to say it (and I usually don't) but someone dropped the ball on this one.

    This article:
    http://money.cnn.com/2009/11/04/technology/cuomo_sues_intel_antitrust/index.htm

    has been up for days now.

    I wouldn't be so critical if it weren't for the fact that I also emailed in a news tip on it two days ago.

    These allegations are identical to what Intel got in trouble for in the EU, and this investigation has been going on for years in the US. It isn't new...we yanks just like to call it antitrust, and the exact laws vary a little. The real story goes beyond lawsuits and fines from the state of NY (which still has more reach than it might sound). The biggest part is that Intel is basically still a US company, and at least for these parts of the company...if this catches the FTC's eye they could force Intel to reorganize however they see fit (like what faced Microsoft years ago)
  • 14 Hide
    Anonymous , November 6, 2009 5:45 PM
    Finally! now all those idiots that were pissed off at the EU for fining intel and ranted all their patriotic american crap can see that it's not the EU who is the problem but intel.
  • 3 Hide
    soky602 , November 6, 2009 5:46 PM
    tester24It's called incentive, saying "hey you buy more of my chips you can get X% discount and sell them at the same price and make a lot more $"AMD couldn't do this because Intel has polluted the market with their chips so AMD couldn't even get a foothold.

    If you own your own business you wouldn't shop the cheaper price if it meant making money.
  • -2 Hide
    alterecho , November 6, 2009 5:49 PM
    i don't think hp falls under this category. Got a hp laptop with
    amd turion x2 processor. Glad i got this. Offers good performance
    for the its price.

    If you ask me, manufacturers would make a killing if they opt amd
    becuse it brings the laptops to an affordable price range so many
    people can buy it. The intel version of the same laptop would have set me back by ~$400.
Display more comments