Intel Corp (INTC)

[Ritz]

141. Dell was finally ready to act, despite the pressure and incentives from Intel. In an April 29 email to other top Dell executives, Michael Dell wrote: “We have been looking at the situation for a long time, and have decided to introduce a broad range of AMD based systems into our product line to provide the choice our customers are asking for.”

142. The reaction of Craig Barrett, Intel’s Board Chairman, was unequivocal: Dell should immediately be deprived of the payments it had long enjoyed in return for its willingness not to offer AMD products, and should start paying “list prices.” Barrett told Ottelini: “[T]hey have just signaled they are only interested in being a transaction based customer. I think you
should reply in kind. Not a time for weakness on our part. Stop writing checks immediately and put them back on list prices asap.” (Emphasis added).

143. The direction Otellini gave his subordinates the next day was consistent with Barrett’s advice. Intel should make clear to Dell that if Dell offered any AMD products all of the “mcp” payments Dell received from Intel would be at risk – just as Dell had always feared: “We should be prepared to remove all mcp and related programs. Post haste… then we ought to enter negotiations.”


Sorry, but this doesn't smell like any kind of volume discounting, it sounds very much like a massive kickback to exclude a competitors product entirely. Very much illegal.