Doug S (foo.delete@this.bar.bar) on September 30, 2013 8:04 pm wrote:
> mas (a.delete@this.b.com) on September 30, 2013 7:20 am wrote:
> > > > Bizarrely enough, non-monopolies are legally allowed to get away with dumping and no-one
> > > > could really argue Intel is a monopoly in mobile chips and expect to win the case ;-).
> > >
> > > I thought companies with a monopoly in one market are restricted from what they
> > > do even in other markets which they may not have a monopoly in. E.g., leveraging
> > > their monopoly position to gain unfair advantage in another market.
> > >
> >
> > Having an internal foundry and using it to gain price advantages over fabless companies is not a sign of a
> > monopoly but a different business model, hell even AMD used
> > to have them for a long time ;-). Critics of Intel
> > can't really have it both ways, i.e. finding ways to label
> > their Fabs either as unsupportable in a new mobile
> > world or conversely an unfair advantage. The same charge can be labeled far more seriously at Samsung which
> > is the dominant mobile OEM *now* and does have its own internal foundries and silicon processes. They would
> > be first in any anti-monopoly firing line but no-one is leveling such an absurd claim on them.
>
>
> Monopolies have a specific legal definition, which basically comes down to having pricing or production
> control over a particular market. The definition of "market" is usually the tough thing. If you define
> the market as the mobile market, then Intel is quite safe from monopoly concerns today, as they have
> almost no share in that market. If the market is CPUs for computing devices, then Intel has quite a
> large share when measured by revenue/profit, but less than a majority when measured by units.
>
> Intel is probably pretty safe today since they have almost no presence in the mobile market, but if they
> were to attempt something like pricing at production cost, leveraging their profits in the PC market to pay
> for doing this, and start taking a majority share of mobile SoCs, they would be virtually certain to come
> under legal scrutiny. It wouldn't even matter whether or not Intel loses such a case, simply the release
> of confidential contracts and business information could impact their ability to continue to do this.
>
> Your argument is basically "Intel is making a ton of money in the PC market, they can use all that
> money to pay for not making any money on the sale of mobile SoCs and knock ARM SoCs out of the mobile
> market". That is exactly the type of abuse monopoly laws were designed to prevent. Whether you
> as an Intel shareholder/fanboy don't like that is irrelevant, the law is the law. The EU, in particular,
> has been quite aggressive of late enforcing the law against this type of behavior.
>
> Samsung is a ridiculous red herring argument that has nothing to do with Intel. Vertical businesses are
> not against monopoly laws, abuse of a dominant position in a market is. Samsung is not dominant at all
> in the foundry market (TSMC has a massive lead there) Nor is Samsung the dominant mobile OEM as you claim.
> They sell more phones than anyone else, but are far from even selling a majority of them. It's just
> that the Android market is Samsung, a few also rans like LG, HTC and Motorola, plus a bunch of Chinese
> companies no one in the west has ever heard of (except Xiaomi) Compare with Intel who sells ~85% of PC
> CPUs by volume and well over 90% by revenue, and everyone knows they could kill AMD anytime they wanted
> to - but don't because they want to preserve the illusion of competition. That's dominant.


Selling at marginal production cost is legal and not predatory pricing. Only selling below and excessively would be considered so. Intel could also rightly argue that there is nothing stopping any mobile company owning its own Fab and developing its own process as Samsung does and Samsung is Intel's automatic get out straight away. Vertical vendors like IBM/Apple/Samsung also have more power to abuse price structures as they can sell any component under or even negative cost if they can make it up in another part of their product and/or ecosystem.

http://en.wikipedia.org/wiki/Predatory_pricing