Electronic Design

Study: Intel Extracted $60B In Monopoly Profits

A study commissioned by Advanced Micro Devices (AMD) found that Intel has extracted monopoly profits from microprocessor sales totaling over $60 billion between 1996 and 2006. The study, issued by Michael A. Williams, director of the ERS Group, claims that consumers and computer manufacturers could gain over $80 billion in the next decade if the microprocessor market was open to competition. Consumers would save about $60 billion and computer manufacturers would save $20 billion, the study estimates. After a six-year investigation, the European Commission (EC) last week charged Intel with violating European Union competition laws. The EC said that Intel provided rebates to companies that agreed to buy the majority of their CPU chips from Intel, and that Intel paid OEMs to delay or cancel the launch of product lines that used AMD-based CPU. While Intel defended its business practices, AMD said the study proves that pro-competitive justifications for Intel's monopoly profits are implausible. "Intel's monopoly profits of $60 billion directly contradict Intel's claim that its business practices have resulted in lower prices," Thomas M. McCoy, AMD executive vice president, said in a statement. AMD's outside counsel O'Melveny & Myers LLP retained the ERS Group, an economic and financial consulting firm.

TAGS: Intel
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