/ June 20, 2008

Processing Out the Competition

Intel, the largest producer of microprocessors, may have been using dishonest practices in order to establish itself as just that. The FTC has opened an investigation that will evaluate certain practices including what appear to be bribes that have been offered to several partners of the computer chip giant. The main competitor to Intel, Advanced Micro Devices, or AMD, will be an integral part of the investigation, testifying to the fact that Intel has been participating in less than healthy, competitive practices. Sources say that Intel has offered its products at a price significantly lower than usual to those companies willing to agree not to do business with competitors. Intel admits to and defends their discounts as practical measures taken to ensure that consumers can continue to afford computers. Although this argument appears to be a valid one in a time of economic struggle, it will be up to the FTC to determine whether or not they will allow such actions to continue.

Seeing as the conclusion will be at the discretion of the FTC, not only will the investigation test the ­­­integrity of Intel as a competitive business, but it may also be one of the first actions to come out of, albeit indirectly, the administration taking office this fall. It is difficult to predict what the result will be considering the uncertainty of who will be taking over the head spot for the FTC. The AMD seems to be looking for tougher price controls in the multi-billion dollar industry, even if that means higher prices for consumers, but depending on who will be appointed the FTC may rule that keeping prices reasonable is more important than entirely competitive business practices.

Source: New York Times

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