This complaint (PDF) alleges a whole host of monopolistic (or “anti-competitive”, or “unfairly competitive”) actions on Intel’s part. Some of the practices include:
Retroactive pricing discounts for OEMs who meet Intel’s purchasing goals: if Dell, for example, buys enough CPUs from Intel, then Intel drops the price, including the price of all of the CPUs sold that quarter. This makes the marginal cost of CPUs zero or negative. This creates pressure on the OEMs to meet Intel-dictated “goals” to remain competitive with the other OEMs.
Joint purchases of advertising campaigns featuring the “Intel Inside” logo. If Toshiba deals exclusively with Intel, then they can use the “Intel Inside” logo, for which Intel will chip in on the costs of advertising. This is essentially a kickback for anyone who plays nice with Intel.
Acting as a third-party “spoiler” to scuttle deals between AMD and their vendors. A particularly revealing case was a deal between NEC, Honda, AMD, and apparently Intel: “Intel was forced to relax its hold on NEC’s business when long-time NEC customer, Honda Motor Company, demanded that NEC supply it with servers powered by AMD’s Opteron microprocessors. After underwriting the considerable expense of designing and manufacturing an Opteron server for Honda, NEC then inexplicably refused to market the product to any of its other customers.” Here, AMD used what little market influence they had, and still ran into a stone wall.
Withholding agreed-to deliveries from OEMs because those OEMs deal with AMD Until the OEM ceases their dealings with AMD, Intel shipments arrive late or incomplete. The stonewalling costs the OEMs reputation with their vendors.
Interference in AMD product launches: Intel cautioned their OEMs that sending executives to the AMD product launch would be seen as a sign of disloyalty, and could cost the OEMs Intel’s cooperation.
Bundling: Intel makes CPUs and motherboards. When you buy these together, Intel gives you a deep discount.
Intel bribes distributors to refuse to deal with AMD.
…And on and on!
Anyway, here’s my first point for debate: (1) Intel has effectively created a monopoly for themselves in the x86 CPU market. I think the complaint is detailed enough that AMD must have some kind of proof for claims that are so radical. My problem is, as a libertarian, I can’t think of a good way to break up the monopoly that doesn’t violate the principal of non-coercion.
If you agree that breaking up monopolies is one role for government, and you accept Premise 1, then you should probably be willing to admit that (2) The U.S. Government should award AMD some relief. I’d entertain arguments against this on lots of fronts: should governments break up monopolies? Is this one of those cases? This is a big point for debate, if you want it to be.
But what I really came to ask is this: how can the government force Intel to play nice? I submit that (3) A truly fair remedy would be a condition that the government would be able to enforce on both companies. An example of this would be uniform pricing schedules – suppose that AMD and Intel were forced to each submit pricing data to a trusted 3rd party, and that any discounts for volume orders were included in this schedule. Both schedules would be published by the 3rd party simultaneously.
What other remedies are possible that Intel can’t do end-runs around by renaming their kickbacks?