Yesterday Intel was slapped with a federal antitrust suit and today some of the juicy details are leaking out. A Dow Jones newswire report claims Dell alone allegedly received from Intel $6 billion between 2002 and 2007. In some quarters these payments exceeded the PC maker's profits.
The lawsuit alleges Intel paid computer makers, including IBM and HP, to discourage them from utilizing microprocessors produced by Intel’s arch-rival AMD, reports Dow Jones Newswires. For example, as a part of the agreement, Intel compensated below-cost bids against rivals offering AMD-based desktops, servers or workstations by Dell in order to slowdown the increase of AMD’s market share.
Under a secret pact named the "Mother of all Programs", Intel paid Dell a rebate based on the total cost of central processing units the computer maker bought, the lawsuit claims. The percentage of the rebate could fluctuate, but reached up to 16% as Dell mulled over using AMD processors. Moreover, in one fiscal quarter Intel’s payments constituted 116% of Dell's reported net income, according to the lawsuit.