Wednesday, August 4, 2010

Our Monopoly Abuse Is Not Like Your Monopoly Abuse

This blog is not about Intel Corporation's widespread and well-known abusive practices as a monopolist. That's gotten them into trouble in Korea, Japan, the European Union, the United States, and elsewhere. Plenty of bloggers are out there to document this.

But we like to 'chime' in from time to time. "Bum-bum-bum-buuuum. Our coercive practices aren't like YOUR coercive practices."

Many people are aware that on Wednesday, August 4, Intel Corporation "settled" the case brought against it by the Federal Trade Commission. What does a settlement mean here?

It means that Intel Corporation knew it would lose, and agreed to nearly all of the FTC's terms, but can now deny breaking the law and maintain the official position that the FTC's complaints are all false. It's akin to pleading 'no contest' rather than 'guilty' in a court of law.

What were the FTC's allegations? The answer would fill hundreds of pages, and in fact does. But a very brief version from The Washington Post:

"The agency investigated Intel's practices going back at least 10 years and found the company 'stepped well over the line.' The FTC said Intel told customers it would not sell products to them unless they agreed to stop doing business with Intel's rivals. The agency also said Intel redesigned its central processing units, or CPUs, to throw off competitors by making it harder for their chips to work with Intel's."

Sadly, in technology, monopoly abuses means essential consumer products are kept much more expensive and unnecessarily so -- a fact that widens the digital divide and keeps vital tools out of reach of billions. The only winners are the shareholders of Intel Corporation, who enjoy profits artificially inflated by rents. In addition, Intel Corporation has retarded innovation through its disregard for legal market practices.

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