AMD files antitrust suit against Intel

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Capitalism and Fairness

The underlying moral foundation of capitalism is that when companies compete to give people what they want, both producers and consumers win. Producers win by making money, and customers win by getting better deals than they could get somewhere else. As long as the system works that way, people who get wealthy do so because they can give their customers a good deal and still make a fortune for themselves, not because they're taking unfair advantage of their customers.

But that foundation falls apart when companies engage in anticompetitive practices, even in the absence of monopoly status. Tactics that work to improve profits by undercutting customers' access to competing products or services turn capitalism from a win-win proposition into a win-lose proposition, a game in which the goal is to manipulate the market in order to profit at others' expense. That kind of behavior destroys the moral foundation that makes capitalism fair to consumers.

The damage is especially great when one company has a monopoly, or when a small number of companies work together to manipulate the market to benefit themselves at customers' expense. The irony is that even while AMD complains about Intel's deplorable tactics, AMD is taking advantage of the fact that Intel is its only serious competition and that as long as the two of them engage in the same anti-consumer tactics, they can get away with it.

Consider how the first three generations of Pentiums could run on multi-CPU systems, but today, we have to pay a major price premium per processor on top of paying for a second processor if we want to run a dual-CPU system from either Intel or AMD. If either company offered a dual-processor-capable CPU at little or no price premium, the other would have no choice but to do so as well. But as long as both companies price-gouge for that capability, they can get away with it.

Posted by: nbarclay   Posted on: 06/28/05 You are currently: a Guest | Members login | Terms of Use

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