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Intel paying Dell to not use AMD chips!?

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In an article published today on money.CNN.com, Robert Parloff outlines a recent lawsuit brought against Dell by Bill Lerach, as well as co-defendants PriceWaterhouseCoopers (Dell’s accounting audit) and Intel. The lawsuit filed, on behalf of several Dell shareholders accuses Dell of accepting “payments” from Intel on a quarterly basis in exchange for a guarantee to not use AMD chips in Dell products.

Lerach, who is sort of a class-action lawsuit guru (his firm has handled cases against Ebay, Oracle, Enron, NYSE, Cisco Systems, AOL Time Warner, and Sprint) claims that Intel paid Dell between $100 million and $1 billion each quarter between 2003 and 2006. The payments were allegedly known to only about 15 top Dell officers, and were negotiated with personal involvement by Grove, Michael Dell, and Rollins.
So far, both Dell and Intel have declined any commentary on the accusations. I think it is very curious however, that Dell just recently began offering AMD chips in its PCs. Although, AMD processors are said to have been technically superior to Intel’s since at least 2004.

If this pans out in favor of Lerach, both Dell and Intel might be in some serious trouble. This is especially the case for Intel, which is also involved in a similar suit in Japanese courts involving questionable “rebate programs” and incentives with Sony, Toshiba, NEC, Hitachi, and Fujitsu.

Written by markusw

February 15, 2007 at 10:59 pm

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