RealTime IT News

Supreme Court Orders Intel Documents Released

The U.S. Supreme Court ruled Monday that chipmaker AMD can request its archrival Intel to turn over documents as part of a wider investigation by the European Union.

But the case does have the ability to set a precedent for a wider range of discovery in cases outside of the United States.

In a 7-1 vote, the court dismissed a petition by Intel, which recently asked the U.S. 9th Circuit Court of Appeals to reconsider its order forcing the company to turn over some 600,000 pages of Intel documents to the European Commission (EC).

The U.S. Supreme Court ruled that U.S. District Courts may provide assistance to the Directorate General of Competition with the EU. Justice Stephen Breyer provided the dissenting opinion, while Justice Sandra Day O'Connor did not take part in the vote.

The Commission is investigating an antitrust complaint filed by AMD four years ago, charging that Intel is abusing its dominant position in the Windows-capable microprocessor market and violating anti-monopoly rules (Article 82) in Europe. AMD wants certain information discussed during Intel's lawsuit against Intergraph to be unsealed.

In her opinion, Justice Ruth Bader Ginsburg said, "whether such assistance is appropriate in this case is a question yet unresolved." But she did point out that, "a federal district court 'may order' a person 'resid[ing]' or 'found' in the district to give testimony or produce documents 'for use in proceeding in a foreign or international tribunal... upon the application of any interested person.'"

The case now goes back to the lower court to determine what documents, if any, will be released to the EC and to give further consideration to concerns raised by Intel.

"This was a very narrowly focused ruling," Intel spokesperson Chuck Mulloy told internetnews.com. "The justices said that even though the staff at the EU view themselves primarily as an investigative agency, they also make judicial-type decisions, so they should be viewed under U.S. law (USC 1782) as a quasi-judicial agency. It is worth noting that the EU has told AMD and the U.S. Supreme Court it does not want this information."

AMD spokesperson Michael Simonoff told internetnews.com the case has never been about intellectual property or AMD obtaining Intel's trade secrets.

"We believe that the European Commission is committed to ensuring that an environment of fair and open competition is permitted to exist across member states," said Simonoff. "The fact that their investigation into Intel's business practices is still ongoing supports that. Our position is that documents AMD is seeking are likely to demonstrate that Intel had misinformed the European Commission about its practices. AMD simply wants the European Commission to have all the relevant evidence available so that they can decide the case with a complete understanding of the situation."

In his opposing position, Justice Breyer pointed out the ramifications for American companies with overseas business practices, pointing out that a "foreign private citizen could ask an American court to help the citizen obtain information, even if the foreign prosecutor were indifferent or unreceptive... thereby opening up the possibility of broad American discovery -- contrary to the antitrust authorities' desires.

"One might ask why it is wrong to read the statute as permitting the use of America's court processes to obtain information in such circumstances," Justice Breyer said in his opinion. "One might also ask why American courts should not deal case by case with any problems of the sort mentioned. The answer to both of these questions is that discovery and discovery-related judicial proceedings take time, they are expensive, and cost and delay, or threats of cost and delay, can themselves force parties to settle underlying disputes."

"This is an oddball legal situation where the EU has not requested documents from a sealed Alabama litigation, but AMD wants a California court to force their disclosure anyway," Peter Kastner, an executive vice president with research firm Aberdeen Group, said. "The Supreme Court now says California gets to decide what is disclosed to Europe. There are broad and troubling ramifications to this decision for multinational companies who have competitors -- which includes all the large tech companies."

The EU renewed its investigation earlier this month following reports in April 2004 that seven countries -- Austria, Belgium, Finland, France, Germany, Italy, and the Netherlands -- ignored an EC mandated, open-bidding process in favor of exclusively purchasing Intel-based computers.

Intel's position in the world is huge with 80 percent of the market for chips that run personal computers and 90 percent of the revenue share worldwide. By contrast, AMD has about 16.8 percent of the market share and barely registers in the double digits when it comes to worldwide revenue share. Taiwan-based Via Technologies and Transmeta round out the top four.

The case is Intel v. Advanced Micro Devices, 02-572.