Intel Case Study Essays

Decent Essays
Case Study Intel’s “rebates” and Other Ways It “Helped” Customers

In your judgment is Intel a “monopoly”? Did Intel use monopoly-like power, in other words, did Intel achieve its objectives by relying on power that it had due to its control of a large portion of the market? Explain your answers.

In my judgment Intel did react like a monopoly. Pure monopoly exists when a single firm is the sole producer of a product for which there are no close substitutes. The characteristics of a monopoly are a single seller, unique product no substitutions, the firm is the price maker and entry and exits are blocked. In this case study there were several evidence that Intel attempted to create a monopoly. First, Intel developed and patented a new
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In your view, did Intel violate either of the two key sections of the Sherman Antitrust Act?
The Sherman Antitrust Act is a competition law passed by Congress in 1890. It prohibits certain business activities that reduce competition in the marketplace, and requires the United States federal government to investigate and pursue trusts, companies, and organizations suspected of being in violation. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by the United States federal government. Section 1 states contract, combination or conspiracy, in restraint of trade or commerce among the several states, or foreign nations is hereby declared illegal. Intel did not break Section 1 of the Sherman Act because the company did not prohibit competing companies from making agreements to fix prices, to divide up territories or customers, or to restrict the quantity of goods they bring to the market. Section 2 of the Sherman Act states every person who shall monopolize or attempt to monopolize or combine or conspire with any other person or persons to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a felony. Intel did violate Section2 of the Sherman Act, Intel employed payments for exclusivity, rebates, and other support conditional on the recipient restricting its business with AMD, as well as threats of
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