The Federal Trade Commission sued Intel* Wednesday, accusing the world’s biggest chipmaker of using illegal tactics to stifle its competition.
The FTC accused Intel, which supplies about 80 percent of the world’s microprocessors, of waging “a systematic campaign to shut out rivals.”
“What the FTC is alleging is that Intel has used its market power to convince computer markers not to use chips from their competitor, a company called Advanced Micro Devices, or AMD,” Arik Hesseldahl, senior technology writer for Bloomberg Business Week, told the NewsHour.
“The tools they allegedly used were things like volume discounts,” according to Hesseldahl. “Say you’re Hewlett Packard. The accusations have been that Intel would sell you a certain number of chips and offer you a discount, but say that if you were to use AMD as well, that discount would be smaller, or you might not get it at all. Those are the kinds of allegations that have been made. Intel has said that these are just volume discounts and that they’re legal and that they had nothing to do with PC makers using or not using AMD. But it has been accused of tying these discounts in this way.”
The suit, the culmination of a year-long investigation, echoes charges already brought against the company in the European Union, Japan, and South Korea. In March, the European Union fined Intel $1.45 billion for similar violations. And last month, Intel agreed to pay rival AMD a $1.25 billion settlement for allegations that echo may of those made by the FTC.
“From a political perspective, it is a very big deal that the FTC is initiating such a wide-ranging case against such a high-profile firm,” Howard University Law Professor Andrew Gavil told the NewsHour today. “It is…accurate to view the Intel case as by far the most significant public monopolization case to be initiated by the federal government since the Microsoft case in 1998.”
Intel responded to the suit in a statement Wednesday.
“The FTC’s case is misguided. It is based largely on claims that the FTC added at the last minute and has not investigated. In addition, it is explicitly not based on existing law but is instead intended to make new rules for regulating business conduct. These new rules would harm consumers by reducing innovation and raising prices.”
“If you take Intel’s argument [about consumers],” says Hesseldahl, “they will argue…and they would be correct, that prices on computer chips have come down over time.” But AMD and the FTC would argue “that consumers are harmed when limits are placed on choice in the marketplace. Intel’s market share is so overwhelmingly large that it can arguably use its considerable resources to have a significant effect on the entire industry.”
*For the record, Intel is a NewsHour underwriter.
With additional reporting by Beth Summers.
Coming up on the PBS NewsHour tonight:
COPENHAGEN LATEST – Protests and paralysis dominated the day’s events at the Climate Change Conference in Copenhagen. The NewsHour’s Ray Suarez will have the latest from the Danish capital, including excerpts from an exclusive interview with UN Secretary General Ban Ki-Moon. We’ll post more of that interview on our website.
AMAZON LOGGING – Some progress was made in Copenhagen today on the issue of deforestation. We have a report from Brazil, produced by Independent Television News Correspondent Jonathan Miller, exploring the challenges faced implementing a UN-backed program called “REDD: Reducing Emissions from Deforestation and Forest Degradation“.
BEN BERNANKE – As the U.S. Senate Banking Committee prepares to vote on Ben Bernanke’s nomination for a second term as Chairman of the Federal Reserve, Jim Lehrer moderates a debate about his performance thus far. Guests: Alice Rivlin, a former Vice Chair of the Fed, and James Galbraith, a professor of Government and Business at UT Austin.
THE RETURN OF KEYNES – An unusual profile of economist John Maynard Keynes, the man behind the concept of government intervention in the economy, as reported by our Business and Economics Correspondent Paul Solman, aided by some rappers. Watch it, and you’ll understand!
WEB-ONLY – At the end of the program, Hari Sreenivasan gives us a tour of web highlights including:
- an update from Ray in Copenhagen and dispatches from our reporting team on the ground
- more from our Patchwork Nation project looking at new data that shows who benefitted from the “cash for clunkers” program… And who did not
- an Afghanistan podcast featuring military experts and human rights watchers debating the wisdom of paying protection money to the Taliban in order to guarantee the flow of supplies
- on Paul Solman’s Making Sen$e, an excerpt of Robert Skidelsky’s biography of economist John Maynard Keynes, and more from our series on the economic year ahead … A look at conventional wisdoms that some economists now pronounce wrong.
That’s all coming up on tonight’s PBS NewsHour, anchored tonight by Jim Lehrer and Jeffrey Brown. We hope you’ll join us.
FROM COPENHAGEN: Among those looking for a productive end to the climate talks in Copenhagen Wednesday was the president of the Maldives, Mohamed Nasheed.
Addressing the negotiators, Nasheed asked for some consensus leading into the final days of the summit.
“Very late last night, [and] early in the morning there was a text that was somewhat finalized but again [today] negotiators are unable to agree on this text,” he said. “I’m so sorry to say that come tomorrow heads of states will not have a draft text in front of them. We will be in trouble and we might not come up with an agreement in Copenhagen … that in my mind is totally unacceptable.”
The Federal Reserve wrapped up its final policy meeting of the year on Wednesday, and, as expected, announced it would keep rates near zero “for an extended period.”
Following two-days of meetings, the central bank’s Federal Open Market Committee voiced optimism about the recovery, saying “economic activity has continued to pick up.”
The Fed’s upbeat assessment suggests it may be nearing an end to some of the emergency measures it put in place during the height of the financial crisis. However, as the Wall Street Journal’s Jon Hilsenrath writes, “They need more evidence that a recovery will be sustainable without so much government support. With the unemployment rate still so high at 10%, they also believe they can afford to wait because there is a lot of slack in the economy that drives down inflation.”
The economy isn’t the only thing Federal Reserve Chairman Ben Bernanke was feeling upbeat about on Wednesday. Earlier today, Bernanke was selected as Time magazine’s “person of the year” for leading “the most important and least understood force shaping the American — and global — economy.” The selection puts the former Princeton University professor in the company of recent winner’s such as President Barack Obama, Russian President Vladimir Putin, and Bono.
The selection comes a day ahead of a Senate Banking Committee vote on whether to confirm Bernanke to a second term as Fed chairman. While Bernanke is expected to win confirmation, he has come under increasing criticism from lawmakers for his role in orchestrating the federal bailout of Wall Street. On Friday, the House passed a bill to overhaul the financial regulatory system that included an amendment that opens the Fed to congressional audits, which Bernanke argues would threaten the central bank’s independence.
On the NewsHour tonight, Jim Lehrer sits down with economist James Galbraith and former Fed Vice Chair Alice Rivlin to discuss Bernanke’s performance before, during, and after the financial crisis.
Updated 3:55 PM ET: The Senate hit a three-hour roadblock Wednesday afternoon in its negotiations over a health care reform bill, when Sen. Tom Coburn, R-Okla., forced a reading of a 767-page amendment to the bill on the Senate floor.
Senators offering amendments on the floor usually ask for — and get — the consent of other senators to dispense with reading the whole text. But on Wednesday Coburn invoked his right to require the 767-page single-payer amendment offered by Sen. Bernie Sanders, I-Vt., to be read aloud in its entirety.
“What this is all about is to try to bring down health reform,” Sen. Richard Durbin, D-Ill., said in a press conference. “And this is a clear strategy.”
Durbin cited a “smoking Tweet” from the Twitter account of Sen. Jim DeMint, R-S.C., as evidence that the Republicans were purposefully trying to stop the Senate from acting.
“Coburn forced Dems to read 767 pg Sanders amendment, we’ll do everything we can to stop this government takeover of health care,” was posted on DeMint’s account.
The standoff lasted three hours, until Sanders pulled his amendment.
Meanwhile, it appears the real action is still going on behind the scenes, as Democrats are still working to iron out intra-party disagreements. Sen. Ben Nelson, D-Neb., whose anti-abortion amendment to the bill was defeated last week, still has not promised his support.
FROM COPENHAGEN: What world leaders have been calling “unthinkable” all week — leaving Copenhagen without a comprehensive draft economic for reducing greenhouse gas emissions — is suddenly thinkable.
There are many big agenda items remaining, and the parties are still far apart. It’s too late in the week to simply assume that the accumulated pressure of more than 100 heads of state will clear all the obstacles and make it happen in the next 48 hours.
Even what’s called the “REDD” talks, on reducing destruction and degradation of the world’s forests — called a relative bright spot in a week of bitter debate — is being called less than meets the eye by some activists and non-governmental organizations who work on the forest issue.
Having said all that, it is true the world’s unfinished business around emissions reductions presents the countries of the world with appallingly difficult choices, and policy decisions whose timelines stretch out far beyond the career of any politician or civil servant.
Let’s take a look at just one example: financing adaptation.
The small percentage of the world’s people who live in the two dozen richest countries are being asked to make changes in the way they live and send a portion of their taxes to people far away living in the poorest countries, the ones mostly deeply affected by climate change.
It’s an income transfer involving billions of dollars meant to help poor countries do the things they must to protect their people from the changes wrought by climate change, some already under way. It’s not clear how much money needs to be collected, how it should be collected, how it should be spent, who should spend it, for how long, and who will check that all along the chain … from the rich world tax collector to the developing world village … nobody’s cheating.
Here in Copenhagen, none of those numbers are fully negotiated. The caucus representing the least developed countries have a figure in mind, and a long timeline of cash transfers, while the rich countries have offered many billions less and a shorter life for the payments program.
Everyone involved has come to Copenhagen with something specific in mind: a goal, a target, a technology, a technique, a demand. It seems like nobody’s happy right now. And it’s starting to look more and more like there won’t be much cause for celebration by Friday night. There may be something agreed to by Friday – but whatever the something is, it may disappoint some of the players.
Ray Suarez will have more from Copenhagen on Wednesday night’s NewsHour.
FROM COPENHAGEN: The U.S. delegation of negotiators cancelled yet another press conference Wednesday, sparing themselves a head to head match-up with Venezuelan President Hugo Chavez who was scheduled for a simultaneous — but separate — appearance next door.
Chavez, meanwhile, appeared to relish his time before representatives of the parties and conference-goers. “There is a ghost running through the streets of Copenhagen,” Chavez said. “Capitalism is that ghost.” Chavez maintained that theme through his remarks saying “if the climate was a bank, a capitalist bank, they would have saved it.”
Chavez was one of six heads of state to address negotiators in the first high-level session Wednesday, the beginning of a new phase of the negotiations, says Paul Bledsoe of the National Commission on Energy Policy at the Bipartisan Policy Center.
When nation’s leaders become involved, it “puts immense pressure on the negotiators to come up with a deal otherwise the heads of state will be subject to political criticism, but more broadly it will seem like this issue is insolvable — I mean if 120 heads of state can’t figure it out how can it be solved,” he said.
Bledsoe, who was also involved in Kyoto Protocol negotiations said the process of negotiations has looked very similar to how Kyoto was formed 12 years ago. The major differences will be the presence of these leaders he said, and the desire to nail down commitments for emissions reductions negotiated with the major developed countries.
If the leaders of the largest emitters in the world, including China and the United States, aren’t able to come to an agreement they could face derision at home for that failure, said Bledsoe, but “it will probably take that level of pressure to get a successful agreement,” he said.
Updated at 11:07am ET
FROM COPENHAGEN: Danish police cordoning off protesters outside the U.N. climate summit weren’t the only ones doing damage control Wednesday.
Danish Prime Minister Lars Løkke Rasmussen took over the presidency of the U.N. climate change summit this morning from Danish minister Connie Hedegaard, a surprise move attributed by the summit leader to the unprecedented number of heads of state attending the climate conference this week, but coming at a time when confidence in a final agreement is low. Rasmussen had a rocky start to his reign, immediately coming under fire from a tense plenary session demanding answers for a new draft text designed to pick up the pace on the lagging negotiations — but that was not circulated to all parties for input.
“We have the hope that we could work on a solely legitimate basis but unfortunately the presidency put forward something from the sky,” said China’s chief negotiator Su Wei, who rejected the notion that China was trying to obstruct the process, arguing “actually it is the illegitimate move by some parties, by putting forward the text from the presidency without fully consulting with the parties that is the real issue that obstructs the progress.”
Rasmussen insisted the text would be presented to the parties later in the day and that at that point questions would be addressed about the future of the Kyoto Protocol, which is an ever-growing fault line between industrialized and developing countries, without “prejudging how we should continue,” he said.
However he urged the negotiators to move forward and said it his responsibility as president of the summit to facilitate progress.
“I think the world is expecting us to reach some kind of agreement regarding climate change, not just discussing procedure, procedure, procedure,” he said.
Among the many other countries that expressed frustration over the new text were India and Brazil, which stressed that negotiators had worked through the night only to feel slighted in the morning by the emergence of the text that was developed without full participation of the parties.
About 115 heads of state are expected at the summit, many of whom are arriving Wednesday.
Editor’s Note: Due to an editing error, an earlier version of this post misidentifed Connie Hedegaard’s role in the circulation of the draft text. It has now been corrected.
–Police push back protesters in Copenhagen on Wednesday, the 10th day of the United Nations Climate Change Conference. Danish police fired tear gas and arrested more than 200 activists, who accuse negotiators of ignoring their voices. (Photo by Adrian Dennis/Getty Images.)
As international climate talks in Copenhagen enter their final phase, Danish police fired tear gas, wielded batons and arrested 250 people Wednesday during clashes with demonstrators.
Inside the city’s Bella Center, representatives from nearly 200 countries appeared close to completing an agreement that would help compensate countries for preserving forests, as well as other natural landscapes, including swamps and fields.
Yet just as the conference should be making a fresh start with the arrival of more than 110 heads of state over the next 48 hours for the summit’s last stages, pessimism seems to be taking over. The Danish chairwoman of the conference, Connie Hedegaard, announced she was stepping down, and British Prime Minister Gordon Brown said a new deal over global warming may not happen.
For his part, President Barack Obama, who will appear at the conference Friday, and the U.S. delegation in Copenhagen, is still holding out hope for an accord.
The biggest sticking points remain the amount of money rich countries will offer to help poorer nations cope with climate change, and whether major developing countries, such as China, will agree to binding, verifiable emission reduction targets.
“Privately, people are saying they just can’t believe that everything can be wrapped up by Friday,” Ray Suarez told Jeffrey Brown from Copenhagen on Tuesday’s NewsHour. “And the talk now is shifting to what an acceptable posture would be for the world’s leaders to leave this place with something, rather than nothing, what the something would be, and how preferable that would be to, in effect, shrugging your shoulders, admitting failure and going home.”
We’ll have more here throughout the day, as well as on tonight’s broadcast, on the climate talks from Ray Suarez and the rest of the NewsHour team on the ground in Copenhagen.
We spoke to him about the initiative on financial literacy that he and Treasury Secretary Timothy Geithner are spearheading. We also discussed the Race To The Top program, which has states compete for more than $4 billion in stimulus money. As the application deadline nears, he gives us an update on the program.