Syndicated PI Ping: Intel Will Pay Rival Chipmaker AMD $1.25 Billion to Settle All Legal Disputes
Intel Will Pay Rival Chipmaker AMD $1.25 Billion to Settle All Legal Disputes (Related PI Article: http://ping.fm/1NwUY)
The settlement will resolve a case pending in Federal District Court in Delaware and two in Japan. In addition, A.M.D. will also withdraw all of its regulatory complaints worldwide.
In addition, Intel agreed to abide by a set of business practice provisions.
Breaking News Alert, The New York Times – Thursday Nov. 12th, 2009
I guess the world must be back on its proper access now as industry heavyweight Intel has agreed to pay a settlement for past misdeeds and to play by the rules the company should have been playing by all along.
But is this really a settlement, or is it merely a celebrated brush under the rug of the corporate mis-deeds that have marred the business landscape far too long?
Even given the European Union’s Competition Commissioner’s statement “that the settlement between the two companies would have no effect on the decision in May to fine Intel a record sum of $1.5 billion for antitrust offenses,” does little to assuage the fact that there is an underlying corruption that might very well be destroying the economy from the inside out.
While the fines and settlement have no doubt hit the giant chip maker where it hurts, the pain may be tantamount to a slap on the wrist for a company that has of May 2009, has a market capitalization of $85.67 billion. It is also worth noting that Intel had also reported that it had achieved “the highest earnings in the history of the company during the second quarter of 2008.”
In essence a combined $2.75 billion dollars in the context of a vast sea of capitalization and record earnings makes one wonder if this is a true deterrent or merely a cost of doing business?
Think about it for a moment, Intel achieved their massive market capitalization and record earnings (during a downward sloping economy I might add) on the back of what is now admittedly corrupt and unprincipled business practices.
The fines that were levied account for approximately 3.25% of their total capitalization. While I do not have Intel’s exact spend on Research & Development, some reports indicate that high technology companies invest on average 7% of their revenues into R&D. Depending on how the company records this “payment” on their books it may not be a stretch to consider this stipend to be viewed as an astute utilization of financial resources. Especially if you take into account what the costs of achieving their present level of earnings and market dominance would have cost had they played by the rules.
This of course leads to a simple yet poignant question . . . should Intel’s earning be considered in the same light as the proceeds from a crime? Should they be allowed to retain their ill-gotten gains, or should a much heavier fine have been imposed?
Perhaps this is “The Hidden Game” to which author John Berling Hardy had been referring in both our November 6th interview, and his book “Have We Been Played?”
Here is the link to the On-Demand version of the November 6th broadcast “Revealing the Secrets of the Hidden Game.”
I would be most interested in your opinion regarding the Intel infraction, and the subsequent settlement.