Crisis Drives Innovation, or in Intel’s Case, Monopolization

I can’t help but comment on this week’s breaking news concerning the European Union’s lawsuit against Intel, mostly because I don’t think I’ve ever come across such a wide-ranging yet barefaced act at locking-in customers.

For starters, I certainly hope Intel is turning a premium profit on their hardware in order to be able to afford to pay customers, or provide other financial incentives, for blocking the use of AMD chips.

Intel is claiming no harm, no foul for rebate and incentive programs to stay away from the competition, but that doesn’t sidestep what I consider the really appalling aspect to all this: the move by Intel to prevent firms from designing hardware around the competition’s product offerings. Here you have a company that’s frustrating innovation and reducing consumer welfare in the process by dishing out payments to delay or scrap the launch of new computers and/or other hardware containing their rival’s products.

To quote the BEUC’s director, consumer choice is the heartbeat of a competitive economy. I’ve heard the idea that crisis drives innovation – i.e. open source during a down economy, etc. – and thus the opportunity to create new options for the marketplace. I’m glad to see Intel has taken that same approach with customer lock-in and monopolization.