Dell hit by Intel's antitrust aftershocks, prepares for $100 million settlement
By Sean Hollister 
posted June 14th 2010 10:57PM
posted June 14th 2010 10:57PM
Hounded by international antitrust allegations, Intel fired an initial $1.25 billion salvo's worth of settlement last year, but now Chipzilla's biggest distributor of silicon is feeling the heat as well. Dell publicly announced it has set aside a $100 million reserve fund to head off investigations at the pass with a potential settlement of its own. While the company doesn't admit wrongdoing, it recognizes "alleged violations of negligence-based fraud provisions," also known as accepting Intel's controversial chip rebates without reporting them to the government. Dell's actually been under SEC investigation since 2005 for accounting-related transgressions and the company now hopes to tie up all loose ends at once -- here's hoping we see cheaper Core i7-infused laptops whether or not execs pull it off.
Dude, you got a lawsuit!
@James T Kirk
I just find it awesome the government is actually taking the bully out and giving it a good slap in the face
@James T Kirk
I can't believe this took so long to happen, back when Dell was the top worldwide PC seller they sold an all intel range when everyone in the industry knew that AMD was faster, more efficient, and (at regular prices) cheaper
@James T Kirk
"I'd shut it down and give the money back to the shareholders." Michael Dell 1997
If he's so wise, he really should follow his own advice.
@JeremyBenthem
A bitchslap at that.
FIRST POSTER DIES IRL
@Randomdude you do realise this isn't the queue to pre-order the iPhone 4 right?
Let's hope for AMD powered systems, or has the purpose of this lawsuit completely eluded Engadget editors?
@nickyP
There already are :
http://www1.ap.dell.com/au/en/home/studio-xps-7100/pd.aspx?refid=studio-xps-7100&s=dhs&cs=audhs1
Studio XPS 7100
As long as this doesn't affect the Dell Streak, I could care less...
@Plazmic Flame
Interesting. What specifically could you care less about?
I hate it when people say they "could care less".
@FAP FAP FAP
The Oxford dictionary already recognizes “could care less” as an American colloquialism. Many people, however, regard it as incorrect since it makes no logical sense (if you “could care less” it means that you care at least a bit).
BINGO!
Just because it doesnt make grammatical sense doesnt mean its incorrect.
@James
Welcome to America: We f*** s*** up.
@James - Dictionaries are OFTEN adding incorrect usages because so many ignorant people use them. That's only recognizing vast ignorance, not 'approving' anything.
@xnonsuchx
Just for the kids, the correct phrase is, "I couldn't care less".
@Ken J - Huh? Why was that addressed to me? I'm all for correct phrasing. ;-)
Dell's going to be creating a streak...This in their underpants.
What!? But Dell isn't Apple, how can someone file an anti-trust suit against them!?
@jellotime91 I don't know, Dell has managed to earn my anti-trust. Preceding words with anti should become an internet meme. Maybe an internet anti-meme...
@nickyP
You are anti-stupid :D I like the idea of that meme.
@nickyP
I'll use this anti-meme.
I always wondered how Dell was able to sell those Q6600 quad core systems that were showing up on slickdeals all the time barely over the retail price of the processor alone.
But if Walmart can get cheaper CDs and DVDs from the industry than other retailers, why is it illegal for other big-box companies like Dell to do similar w/ CPUs?
*confused*
@Ducman69
"Hi, we are going to sell a truckload of your CDs, give us a discount."
vs.
"Hi, we agree not to put AMD CPU in our computers, give us that discount."
@Ducman69 you have to remember, this is the EU we're talking about. these are the people that forced microsoft to ship windows 7 with browser options other than their own internet explorer.
blablabla security. it's their own bloody product. if you don't like it, don't buy it, or install firefox/chrome/opera/whatever yourself.
compared to that, this actually has legit grounds. i still think it's ridiculous though
@Ducman69 Firstly, to trust the retail channel on how to price is to, in a small form but not as bad as most, drink the kool-aid. Intel selling these in retail is to give a price illusion, also, these higher prices help subsides the rebates they used to get while keeping their profit levels intact.
The best way to think about it is, if they can shut their competitor out, yes we might see *even better* discounts off of MORE INFLATED prices...in the end, the consumer would lose even if the sign says "SALE!". It's part of marketing and the psychology of pricing, while still maintaining incredible margins.
@bebop Actually, the way Walmart did it was "75% of CD and DVD sales in the US are made through our chain stores, but it accounts for only 5% of our profits. We can afford to stop selling CD/DVDs, you can't. Give it to us cheaper or else". ;)
The Intel deal also doesn't sound that shady to me. Intel says, we'll sell you our processors super cheap if you use us instead of AMD chips. While Intel was clearly trying to starve out AMD, Dell was just going with the lowest bidder, something all businesses did.
@Ducman69 It doesn't actually mean that Intel was the lowest bidder, one could maybe argue better value, but that's something consumers should decide. Also, I think the damming evidence was that in the past more than 50% of Dells annual (maybe quarterly, I can't quite recall but I think it did exist for a prolonged period like a year or two) was for rebates. Once they stopped having Intel as an exclusive supplier these rebates for the most part dried up (on the order of like 90%). This was regardless of sales figures, so even had Dell's purchases increased, their rebates and profit levels from rebates took a major economic hit.
Again, if you can eliminate your largest competitor within the desktop and laptop computing environments, you can create a monopoly, which is something governments seek to prevent.
@Ducman69 - Intel made many 'secret' deals (possibly THREATS) w/ PC makers (and some retailers) to give Intel preference over the competition. This kinda thing may expand well beyond Dell...esp. w/ other govt. investigations still on-going.
@xnonsuchx If we believe that Dell was threatened, why is Dell subject of lawsuits.
I guess thats my confusion.
I know what Intel was trying to do, its simple starving out a weaker opponent with lesser cash reserves. Its like what Reagen did to the USSR. Outspend them and they collapse.
@Ducman69 - Because if that's your logical comparison, your logic is terribly flawed. It's an issue of others GOING ALONG with them even though they knew the deals were at least somewhat shady. There's a big difference between just spending more on marketing and colluding with buyers to harm competitors. Would it be fair of McDonalds to pay truckers NOT to handle any supply deliveries to BK/Wendy's/etc...or for Heinz to require all grocery stores that want to sell it to not sell any Hunts brand items?
@xnonsuchx Those are horrible analogies.
It'd be like if the beef industry offered to sell McDonalds hamburger patties for less if they discontinued the McChicken.
@Ducman69 - You STILL don't get it. Oh well!
All I know is, I love my new Dell Studio 17 with the Intel Core i7 :)
Intel's sales force truly acted like the Mafia. I hope they get the book thrown at them.
@hyundaifanscom The mafia goes to people and offers their products at great discount to use them instead of a competitor?
And here I thought the mafia was more about violence.
Learn something new every day.
@hyundaifanscom
And selling you product at a lower price to get customers doesn't sound anything like AMD right?
@Dysun - No, selling them at a lower price than you're selling them to others (as well as other dishonest activities) to get them to help you try to force others out of a market is what's at issue.
I have a hard enough time setting aside a $100 reserve fund...
I can't give you 100 million dollars right now....
...because I already gave it back to the shareholders!!!!
ba doom CHING!
@brrip Because everyone decided to get an EVO
..i had to :p
Hello AMD! Long time no see...
Hi I'm AMD, and I'VE GOT DAT CASH MONEY, DAT 100 MILLION DOLLAR MONEY! Woahhhhh!
(Also I got 1.25 Billion) Win. Where the fk is our new processors. BULLDOZER OH WHERE, OH WHERE IS OUR PRETTY BULLDOZE!?
more coverage link didn't work
@engaged Found how it works, you need to visit google news search, then click on Wall Street Journal to see full text without registration
http://news.google.co.uk/news/more?pz=1&cf=all&ned=uk&cf=all&ncl=d2PltulcFv-ZdIMXFrsu-tACtpR-M
haven't you guys heard of that old memo which was passing around precisely the time Intel was bulldozing the competition? "some shipments COULD get delayed" if dell went with AMD. now in a market where Intel is the uber-gorilla... what can little dell do?
@cUjO I haven't heard, can you help me to find more about this?
Thanks, government, for forcing computer prices up.
So why is Microsoft still getting away with it's "marketing dollars" campaign?