by Martin Veitch

Intel ruling unlikely to change nature of dominant incumbents

May 12, 20092 mins
IT Strategy

For the last 20 years, there have been whispers about Intel, with off-the-record comments about bullying behaviour, funding for partners and general strong-arm tactics. Now the EU has acted in decisive manner, hitting the chip giant with a £948m fine.

For AMD, so long the junior rival to Intel in the massively lucrative market for PC processors, today will be a cause for celebration. The pair have long been at daggers drawn and this is only the latest in a series of spats. Famously, AMD in the early 1990s won the right to reverse-engineer x86 chips and Intel even attempted to defend the right to maintain exclusivity on the x86 (286, 386, 486 etc) nomenclature. Respective bosses Jerry Sanders of AMD and Andy Grove of Intel squabbled like Walter Matthau and Jack Lemmon’s Oscar and Felix characters in The Odd Couple. It was entertaining stuff but nobody doubted the size of the stakes being fought over.

Intel’s fine might even be considered to be on a small scale for a company that has built a market capitalisation of $85bn but it confirms the impression that Intel has met its regulatory match in the European Commission which has now completed a double whammy for the famed Wintel axis.

Although some might like to paint a picture of Intel and Microsoft as the Evil Empire of technology, the facts are more prosaic. Before this pair it was AT&T and IBM that were closely watched by regulators and today it is Google and Apple. Companies leading markets always push right to, and sometimes past, the legal limits and employ legions of lawyers and lobbyists to ensure they get maximum advantage when they are on top.

Optimists might like to think that this ruling and that on Microsoft will change the nature of dominant incumbents — but that’s probably just wishful thinking.