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What incentive conflict being controlled by loyalty payments

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Reference no: EM132995076

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.

Address the following in your discussion post:

Question 1: What incentive conflict was being controlled by these loyalty payments?

Question 2: What advice did Intel ignore when they adopted this practice (consider how the Robinson-Patman Act applies to their practice) and speculate why Intel ignored the advice.

Reference no: EM132995076

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