Digging Into N.Y.'s Antitrust Suit Against Intel - Page 2

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Why New York?

So Cuomo is hardly the first to go after Intel. As Intel defends itself in Europe it also prepares to defend itself in the Delaware case against AMD. The first meeting with the judge is in January.

All of which left Manishin confused about Cuomo's actions. "I find it surprising that New York would sue on its own. That's curious because either it means – and I don't know for sure – that New York and attorney general Cuomo felt that the federal government will not proceed against Intel or he knows they want to proceed and wants to go first," he said.

From the outside, it's hard to tell whether this is a split between the feds and the state, because usually they work together. "That's significant because going back to the 1990s, the association of attorneys general, the DOJ and the FTC have worked together, hand in glove and are usually co-plaintiffs," said Manishin.

It's not so unusual for a state to try and protect its citizens if the antitrust laws are being violated, argued Foer. "The guy's job as AG is to protect the consumers and businesses of his state and make sure antitrust laws are being applied," he told InternetNews.com. "They have no reason to assume the FTC will bring a case. Even there, the FTC is not going to get a remedy for the people of his state."

Settlement?

Cuomo didn't just file under the state laws of New York, he went to Delaware and sued under federal law, something he has a right to do, as what's known as a parens patriae action.

Foer wonders if there isn't a potential settlement in the works, something Intel has sworn up and down it would not do. If Intel and AMD settle, New York gets nothing while AMD could walk away a few billion dollars richer.

"Perhaps there's some major settlement under way. Maybe that explains why the FTC has been moving slowly. If there is a settlement, the states might want to be at the table to make sure their interests are satisfied adequately," said Foer.

Manishin thinks that could be a credible explanation for Cuomo's behavior, since it's so outside the norm. "They wouldn't have the advantage of getting testimony of those folks from trial in the [AMD] lawsuit," he notes.

Right now, the testimony is from executives and e-mails dating back as far as 2002. A trial could mean a parade of past and present PC OEM CEOs like Michael Dell, Mark Hurd, Carly Fiorina and Sam Palmisano testifying under oath, which could be either devastating or exculpatory to Intel.

Testa doesn't believe it was on that level. "I truly believe that this was a mid-level, low-level management issue where you had an aggressive sales person or sales managers. That's my gut. These rebates are public knowledge. This is between two public companies," he said.

The latter part of Cuomo's claim that "Intel launched an illegal campaign to deprive AMD of distribution channels and consumers of product choice and lower prices" could be a tough sell, since no one would argue that CPU prices haven't come down over the course of the decade even as they advanced and became more powerful.

Manishin said the counterpoint to the pricing argument is the question of whether Intel's actions prevented AMD from helping to drive prices even lower.