loyalty payments and supply chain rules

by

Loyalty Payments-Supply Chain Rules

Intel made large loyalty payments to HP in exchange for HP buying most of their chips from Intel instead of rival AMD. AMD sued Intel under the antitrust laws, and Intel settled the case by paying $1.25 billion to AMD.

  • What incentive conflict was being controlled by these loyalty payments?
  • What advice did Intel ignore when they adopted this practice?
  • Why did they ignore it?

Be sure to cite all source used.

PLEASE DO NOT RELY ON WIKIPEDIA, INVESTOPEDIA OR ANY OTHER PEDIA AS A REFERENCE AT ANYTIME IN THIS COURSE.

Rules for credit in the discussion:

Your Pin, the presentation of your solution to the above, 120 words required for full credit of 10 points. Click the large Yellow Button Pin +

Comment/Reply to 2 other participants, 30 words each required for full credit of 5 points each.