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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Ali Chen who wrote (226267)	2/18/2007 3:41:49 AM
From: pgerassi	Respond to of 275872

Dear Ali: "of like grade and quality" The overview defines this and you are taking to narrow a view. Besides, most lay people for whom the act was designed, an Intel and AMD x86 or AMD64 CPUs are comparable thus satisfying the above definition. And it doesn't come into play when its Intel CPU compared to Intel CPU. Those OEMs do resell the product especially for upgrades, thus they are resellers. Besides, by the Robinson-Patman definition, all OEMs and WB makers are resellers. You should read the overview before claiming "loopholes". It will open your eyes. And you would realize how little wiggle room it gives Intel. Look at the part about cumulative discounts which are strictly illegal. In Lepage vs 3M, loyalty or first dollar discounts were strictly forbidden. Even if the overlap of the product range is narrow, 3M still could not bundle pieces that Lepage competed against with those they didn't have comparable product. All AMD has to do is show that Intel was doing cumulative discounts and Intel loses. There is a heavy burden of proof on Intel to have customer specific discount schedules. And the more occurrences of such and it becomes exponentially harder to prove a legal reason. If it boils down to maintaining a monopoly, Intel is toast. Pete

To: Ali Chen who wrote (226267)	2/18/2007 10:28:48 PM
From: Petz	Read Replies (2) \| Respond to of 275872

re: <<"I hardly think advanced microprocessors qualify as commodities.">> <Not only they are not commodities, but also the act says that they must be "of like grade and quality".> The legal definition of a "commodity" is not at all what the commodities exchanges call a "commodity." Cellephane tape isn't a commodity by that definition either. I am sure 3M trotted out all kinds of patents, processes, labelling, etc. that made their tape "unique," thereby not a commodity. They lost. I do admit that cellophane tape is MORE of a commodity than microprocessors are, but its a tough line to draw, and if anti-competitive behavior is aparent, I don't think the "not-a-commodity" argument will hold water. AMD is not trying to argue that contracts cannot contain unique items such as those you allude to, and the court will grant reasonable economic cost to special handling, inventory processes, thermal compound or whatever you might think of. I doubt very much that ANY economic justification can be found for the end-of-quarter "first dollar rebate." It is, pure and simple, a technique designed to make it economically impossible for an OEM to increase its purchases of the minority company's products. It's also really impossible to wield this tool with OEM's that have more than about 30% market share from the minority competitor, unless you really cheat at it. It's impossible to set targets that are high enough to prevent the minority market share from growing, but not so high as to make it likely that an OEM fail to meet the target even though they were "loyal." Petz