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

To: Windsock who wrote (259405)	4/3/2009 7:16:40 PM
From: Elmer Phud	Read Replies (4) \| Respond to of 275872

First, the objective of the antitrust laws is the prevention of injury to consumers. Oh I can see what's coming. Not having a strong competitor is ultimately injurious to the consumer. Therefore the introduction of superior products at competitive prices is anti-competitive because it weakens the competition and is itself a violation of Anti-Trust Laws. I think this will fly in Europe but hopefully not here. You know someone here will claim this.

To: Windsock who wrote (259405)	4/3/2009 8:27:31 PM
From: pgerassi	Read Replies (1) \| Respond to of 275872

Windsock: Intel's price discounts are procompetitive and benefit the consumer. AMD never explains how the consumer is harmed by lower prices ... Sure they do. AMD states that each company Intel deals with has a different price discount schedule. That is strictly illegal under antitrust law with the only exception is that has to be economically justified in each case. That allows for each company to be forced by the discounts have to purchase all of their expected CPUs from Intel. By the way the latter doesn't need to be proven, because if any discount schedule doesn't have legal economic reasons to be different, then all of the different ones are illegal. Of course if AMD does prove that any one discount schedule is specifically tailored to exclude AMD CPU purchases from that company, that is a slam dunk case, because that is always illegal. And that always hurts the consumer, because their choice is restricted. The competitor's products could be better, faster, cheaper, more desirable or any combination of them and they can't purchase those products. Second is those dollar one rebates. Those are strictly illegal, because they use volume to restrict smaller competitors. Customers are harmed by the fact that the initial volume is at a higher price and that pays for the later "discounts" setting a marginal price below the cost of production. That yields the same results as the above, harm to the consumer. Third is those advertising rebates. If they are conditional in any way detrimental to a competitor, like they are rejected because the company purchased CPUs from a competitor, then they are also illegal. Its easy to see that this harms consumers. The money comes from the revenue of the defendant. The defendant gets it from the purchasers. They in turn get it from consumers. So the consumer ultimately pays for all that extra advertising. Now if they purchasing company always gets paid back for their part of the advertising, it doesn't run afoul of antitrust law per se. But if any payment is due to being "loyal" or not doing what the defendant wants the company to do, that is coercion and intimidation which harms competition. Plus these illegal acts are paid for by the customer in increased prices for those products plus the missing of the option to purchase a competitor's products. The rules of the above tighten, when the defendant is found to be a monopoly. All of the above are abuses of a monopoly. And they are felonies to boot. AMD could get even more damages by proving RICO against Intel. Three felonies by a defendant group or company can be shown to be a corrupt organization. I don't know whether the damage boosts are parallel, additive or multiplicative (getting triple damages for Antitrust and RICO means that AMD gets 3 times its actual damages, 5 times (2 extra for antitrust and 2 extra for RICO) or 9 times (triple actual for antitrust and triple again for RICO). Each of the above allegations boost the actual damages from the previous combo. These are just some of the allegations by AMD against Intel. Thus these aren't really lower prices, but money that is paid for by the consumer in addition to the price, where this doesn't go on, to allow these acts. If the consumer wasn't paying for this during the time, Intel would have been losing money hand over fist. And it would still be illegal. Pete

To: Windsock who wrote (259405)	4/4/2009 12:31:37 AM
From: fastpathguru	Read Replies (2) \| Respond to of 275872

Antitrust law is designed to protect and benefit consumers not to protect a competitor. Yeah, just like I said. Intel's price discounts are procompetitive and benefit the consumer. AMD never explains how the consumer is harmed by lower prices but instead complains that it is harder for AMD to win business deals. Yes they do. The describe an alleged system of loyalty rebates tailored to the demand of each OEM that take advantage of AMD's lesser production capacity, using the uncontested portion of a customer's demand to subsidize below-cost pricing for the portion that AMD competes for. AMD's solution is to require Intel to raise prices so it is easier for AMD to sell its inferior products -- definitely not a step that "is designed to protect the process of competition". Higher prices would only protect AMD -- a bumbling and ineffective competitor. No it isn't. AMD's solution would be to replace Intel's coercive tailored loyalty rebates with a standard rebate schedule based on justifiable volume efficiencies. The consumer injury requirement can be understood as an element to be proved before liability can be found under the antitrust laws Interference with AMD's access to a free market, based on the abuse of Intel's dominant supplier status through coercive loyalty rebates, rather than the merits of their products (i.e. perverting the process of competition) is inherently injurious to consumer welfare, as consumers are optimally served by an uncorrupted free market. Practically, the injury manifests as reduced consumer choice, and (when you crunch the numbers of coercive loyalty rebates) higher prices. fpg