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Have you heard about NY State Attorney General Andrew Cuomo’s lawsuit against Intel?  Cuomo is alleging that Intel has engaged in anti-competitive practices which have prevented other companies (primarily AMD) from selling their products, and PC makers from using them in their machines.

My own opinion, detailed in this post, is that Cuomo is doing a bit of grandstanding here in his zeal to continue the NYS AG office’s activist role, established when Elliot Spitzer still held that office.  I am a registered Democrat and I don’t think activism is bad.  But I beg to differ with Cuomo’s position that the chip industry and the CPU market are uncompetitive and that the NY State consumer has thus been harmed.

AMD has made a business out of building, in effect, Intel x86-compatible CPUs, at competitive prices.  And that’s good for competition and the market.  When Intel’s initial strategy of (essentially) abandoning the x86 architecture in its 64-bit products hit the market, it failed, and AMD benefitted.  AMD had excellent x64 products and their market presence forced Intel to counter with their own such offering, which ended up being even better.  That’s how a competitive market is supposed to work!  Now Intel has the Atom chip on the market and and is pushing them so aggressively, at such low prices, that they are actually taking away market share from their more expensive chips.

These are not the actions of a monopolist.  Intel is innovating and giving consumers excellent products at compelling prices.  Regulation is neither called for nor productive.  In fact, regulation would inhibit the very innovation Cuomo says he wishes to emancipate.

Do you agree with my concerns?  If so (and especially if you live in New York State), please consider signing this online petition (http://ga4.org/campaign/chipinnovation), from the Association for Competitive Technology (on whose Board of Directors I serve), to let Cuomo know how we feel.

Should you choose to sign, thanks for your support.  And, either way, thanks for listening.

 

Posted on Wednesday, November 11, 2009 10:48 PM | Back to top


Comments on this post: Tell Andrew Cuomo the Semiconductor Market Works Just Fine

# re: Tell Andrew Cuomo the Semiconductor Market Works Just Fine
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You are not addressing the arguments put forth by Cuomo. If, in fact, Intel has bribbed companies to carry their products or threatened to pull their products if a firm carried a competitive product from another vendor, they are acting in a monopolistic fashion that is bad for the public. I doubt very seriously that a lawsuit by the state will negatively affect progress in the industry. Intel has been instrumental, and I believe it will continue the policy of cranking out the next generation of chips to foster the idea that computer hardware should be replaced at a faster and faster pace. As for your comment regarding the Atom chip, most companies expect that newer products will eventually take market share from their own older products. That argument proves nothing with regard to their monopolistic actions.
Left by Ken C on Nov 15, 2009 9:34 AM

# re: Tell Andrew Cuomo the Semiconductor Market Works Just Fine
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This sound like Cuomo is bringing the same case justice brought against Microsoft. How much money it brought in to the government because all this seem to be is a cash grab. The state needs money and Intel seem to have a lot of it. You could expect the other shoe to drop in a few weeks when Holder and the boys over at Justice joins the case. Right now they are working out how much of the company the state gets, how much the federal government gets and how much the unions get after they throw out the share holders and fire the CEO. No more of that, split the company in 2 and Bill doubling his shares. We may soon be buying our computer chips from Obama. We have something to be thankfull for though. They are not trying to tax our salaries a 90% yet.
Left by Richard on Nov 15, 2009 2:53 PM

# re: Tell Andrew Cuomo the Semiconductor Market Works Just Fine
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With the state budget crises, this may have more to do with the need to come up with new sources of money. If NYS were to win, I doubt the consumer would get anything out of this.
Left by Mike Selender on Nov 16, 2009 8:57 PM

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