Ethics in the Marketplace

Case: Intel's "Rebates" and Other Ways It "Helped" Customers

FAHMI NUR ALFIYAN

452289
RINA PUTRI RINALDI
 ECONOMIC MODELS
4.3% 3.4%
4.3% 3.4%
3.4%
20% 20% 4.3%

4.3% 30.8%

4.3%

29.8%

20% 20%

78.3%

20% 29.1%

PERFECT PURE
OLIGOPOLY
COMPETITION MONOPOLY
PERFECT
COMPETITION
There are many buyers and sellers, The costs and benefits of producing
all have only a small share of the or using are born entirely by those
market. buying or selling the goods

There is free entry and exit of All buyers and sellers maximize
markets. utility.

Everyone has full and perfect There are no external parties that
knowledge of what everyone is regulate prices, quantity or quality
doing. of goods in the market.

The goods sold in the market are

similar to each other and no one
cares from which each buys or sell.
 Perfect Competition

JUSTICE UTILITY RIGHTS

As a states before perfectly
competitive markets achieve three
moral values:
They lead buyers and sellers to
exchange goods in a way that is
just.
They maximize the utility of
buyers and sellers.

They make buyers and sellers

allocate and distribute their goods
with perfect efficiency.
 MONOPOLY COMPETITION

A monopoly market has one

dominant seller instead of
numerous sellers.
There exist barriers to entry
that keep companies out
A monopoly violates capitalist justice, utilitarianism and
negative rights:

It violates justice because the company charges more

for products than they know the products are worth.

It violates utilitarianism because it keeps resources out of

the market while there are shortages in supply. These
resources are diverted to markets without such shortages.
This removes the incentive to use the resources efficiently.

It violates negative rights because a monopoly keeps other

companies from entering the market and it forces buyers
to purchase goods they not want. A monopoly also forces
consumers to accept the price and quantity it charges.
OLIGOPOLISTIC
COMPETITION
Some oligopoly markets are
dominated by a few large firms.

Most oligopolies are formed via

horizontal mergers.
 However, there are also other ways of competing
that aim at destroying competition itself.

Explicit agreements and other

Bid rigging
anticompetitive tactics

Price-fixing Exclusive dealing arrangements

Manipulation of supply Retail price maintenance

agreements
Market allocation Predatory price discrimination

Tying arrangements Bribery

OLIGOPOLY AND PUBLIC POLICY

The Sherman The Clayton Act

Antitrust Act
 MAIN VIEW ON OLIGOPOLY POWER

The Do-Nothing
View
The Antitrust
View
The Regulation
View
 Intel's "Rebates"
and
Other Ways It "Helped" Customers
 INTEL AMD
Didirikan oleh Gordon Moore, Robert Didirikan oleh Jerry Sanders, Jack
1968 1969
Noyce, dan Andy Grove Gifford, John Carey, Larry Stenger,
Frank Botte, Edwin Turney, Sven
Simonsen, Jim Giles

Intel membuat microprocessor AMD membuat klon dari

1971 1991
pertama, Intel 4004 microprocessor Intel 80386, diberi
nama AM386

AMD membuat microprocessor

1996 pertama yang sepenuhnya dirancang
sendiri, yakni K5

Menguasai lebih dari 70 persen pasar Menguasai sekitar 25 persen pasar

1999 1999
microprocessor microprocessor
MARKET MICROPROCESSOR
Ada beberapa "barriers to entry" untuk
masuk ke pasar:
Intel dan AMD memegang hak paten untuk
membuat jenis mikroprosesor yang hampir
semua komputer pribadi gunakan.

Memerlukan biaya miliaran dolar untuk

membangun fasilitas pembuatan
mikroprosesor.
Intel dan AMD sangat besar dan berpengalaman
sehingga mereka sekarang dapat membuat
mikroprosesor dengan harga yang jauh lebih
murah daripada yang dapat dilakukan oleh
perusahaan baru.
 PERSAINGAN
INTEL VS AMD
Intel menginvestasikan ratusan juta dolar untuk
mengembangkan mikroprosesor jenis baru yang tidak
akan menggunakan "teknologi x86". Intel menyebutnya
prosesor "Itanium"

AMD juga mengembangkan prosesor yang lebih

canggih namun masih menggunakan "teknologi x86",
yaitu "Athlon".
 JURUS JURUS INTEL

Mengubah "Rebates" Menekan

"Compilers" Perusahaan
dan Lain
"Libraries"
 INTEL MEMBERI "REBATES" PADA DELL

2001 Setelah tidak memperoleh "rebates"

Dell Inc. berhenti menggunakan produk AMD
laba Dell Inc. mengalami penurunan.
2002
Intel memberi "rebates" kepada Dell Inc.
sebesar $ 100 juta
2004
Intel meningkatkan "rebates" untuk Dell
Inc. menjadi sebesar $ 300 juta INTEL MENEKAN PERUSAHAAN
2006 LAINNYA
Intel meningkatkan "rebates" untuk Dell
Inc. menjadi sebesar $ 805 juta Intel juga menekan perusahaan besar
lainnya untuk tidak menggunakan
2007
prosesor AMD, yaitu HP dan IBM.
Intel tidak lagi memberikan Dell Inc.
"rebates"
 GUGATAN terhadap intel

Komisi Perdagangan Adil Jepang memutuskan bahwa Intel telah melanggar

2005 undang-undang antimonopoli Jepang dengan membayar perusahaan untuk
membeli semua atau hampir semua prosesor secara eksklusif dari Intel.

AMD menggugat bahwa Intel menggunakan cara yang tidak adil dan ilegal
27 JUNI 2005
untuk menghalangi mereka dari dalam pasar.

Komisi Perdagangan Adil Korea Selatan memutuskan bahwa Intel telah

5 JUNI 2008 menggunakan kekuatan monopolinya yang melanggar undang-undang
antimonopoli.
Komisi Eropa mendenda Intel dengan rekor $ 1,5 miliar dan mengatakan
5 MEI 2009
perusahaan telah menggunakan kekuatan monopolinya untuk memblokir AMD
dari pasar secara tidak adil.
Jaksa Agung New York Andrew Cuomo menggugat Intel karena merugikan
4 NOVEMBER 2009 konsumen New York dengan cara untuk mencegah pembuat komputer membeli
mikroprosesor AMD yang lebih baik.

Komisi Perdagangan Federal AS (FTC) menuntut Intel karena "monopoli ilegal,"

AKHIR 2009
"metode persaingan tidak adil," dan "tindakan "deceptive" dalam
perdagangan."
 QUESTIONS?

In your judgment is Intel a

1
"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?
 QUESTIONS?

2
In your judgment, were Intel's
rebates ethical or unethical?
Explain your answer
 QUESTIONS?

Was it unethical for Intel to use

3
its compilers and its libraries of
software code in the way it did,
or is this permissible for
companies in a free market
economy? Explain your answer
 QUESTIONS?

4
Were Intel's rebates unethical?
Explain why or why not?
 QUESTIONS?

5
In your view, did Intel violate
either of the two key sections
of the Sherman Antitrust Act?
Explain