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Intel Accused of Giving Dell $6 Billion in Perks

by - source: Tom's Hardware US

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.

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BoxBabaX 11/06/2009 8:09 PM
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-20+

Wow, this looks very bad for Intel.

nforce4max 11/06/2009 8:12 PM
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That explains the flood of Pentium4s that so saturated the PC market and is impossible to avoid unless you only work on macs.

Parsian 11/06/2009 8:13 PM
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Suffer Intel, you don't deserve where you are. When AMD was ahead in performance, they werent gaining anything because Intel's practices.

war2k9 11/06/2009 8:16 PM
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Dell should thank Intel for the money.

cruiseoveride 11/06/2009 8:21 PM
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We all know Intel is Evil

ominous prime 11/06/2009 8:22 PM
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Wow, talk about shady business practices.

830hobbes 11/06/2009 8:23 PM
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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.

hellwig 11/06/2009 8:26 PM
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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.

tipoo 11/06/2009 8:28 PM
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Apple STILL uses exclusively Intel chips across their entire lineup. Whats with that?

7amood 11/06/2009 8:28 PM
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uberlaff 11/06/2009 8:32 PM
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Damn... I'll start selling Intel PC's if they pay me more than I'm actually making on the PC's!

landerx74 11/06/2009 8:33 PM
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soky602 11/06/2009 8:39 PM
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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.

bill gates is your daddy 11/06/2009 8:40 PM
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$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.

megamanx00 11/06/2009 8:41 PM
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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.

tester24 11/06/2009 8:41 PM
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landerx74 :
This 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.

nekatreven 11/06/2009 8:44 PM
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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/te [...] /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)

Anonymous 11/06/2009 8:45 PM
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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.

soky602 11/06/2009 8:46 PM
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tester24 :
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.


If you own your own business you wouldn't shop the cheaper price if it meant making money.

alterecho 11/06/2009 8:49 PM
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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.

bill gates is your daddy 11/06/2009 8:50 PM
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Good Lord people. This isn't some whimpy "buy 2 get 1 free" deal. This is "buy one, don't buy AMD, receive $6 billion dollars"

Drop your idiotic fanboyism for 5 seconds and really look at what is happening. It's a monopoly and its wrong. Just as wrong as if AMD was given the deal and they were trying to crush Intel out of the market.

Stop playing favorites and just admit this business practice is wrong for everyone and also hurts the consumer.

itakou 11/06/2009 8:57 PM
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Isn't this the same as how we see certain stores (movie theaters, schools, malls) only selling coke, while others only sell pepsi?

The soda companies use similar practices and have contracts for stores to only sell their products.

presidenteody 11/06/2009 9:10 PM
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ravewulf 11/06/2009 9:16 PM
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Wouldn't be surprised at all. Has anyone noticed that the vast majority of computers advertised in sales circulars, newsletters, and ads all have the Intel logo?

Intel needs to stop being a prick and AMD needs to stop taking it and work on stepping up their marketing.

rooket 11/06/2009 9:22 PM
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Off topic but on topic for this web site. This huge castrol add is f***ing annoying and covers half the screen even when I don't scroll over it. I think castrol is getting thumbs down in my book already.

itadakimasu 11/06/2009 9:24 PM
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is that why the optiplex 740 is the only AMD optiplex I can think of?

bill gates is your daddy 11/06/2009 9:24 PM
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presidenteody :
well, i don't think offering rebates is a bad thing!



Inform yourself before speaking. This was not a rebate. This would be Newegg telling you that you can receive this discount but only if you promise to never purchase anything from Fry's Electronics again.

socrates047 11/06/2009 9:26 PM
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support amd

sqhacker 11/06/2009 9:28 PM
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to be honest with you as bad as their business practices are, intel still holds a strong chip, now if their plan was to take out AMD's knees from under them when they had superior chips thats kinda cheap but why doesnt anyone blame the huge orginazations for their sleezy dealings with intel as well? "hey dell here is 1.2 billion a year to go with us" i'da done it too...

Herbert_HA 11/06/2009 9:32 PM
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I believe the problem is not that Intel was giving discounts, but that they were giving discounts IF the seller wouldn't sell AMD computers, keeping them out of the market.

MiamiU 11/06/2009 9:39 PM
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soky602 :
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.


if only this, or if only that... think anyway you want it, but the fact is there was no sales discount or promotions for buying bulk. It was Intel buying of Dell and others (with "incentives")into selling Intel cpus exclusively.

How about "if only people would of it as" comparing this to how the oil industry pays companies to have new technology bared and have us hooked on high oil consumption.


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