RealTime IT News

AMD to Intel: We Told You So

AMD wasted little time attempting to exploit the European Commission's (EC) Friday charges that the world's number chipmaker engaged in antitrust behavior against AMD.

Two days after the EC levied the accusations, AMD CEO Hector Ruiz said on a national teleconference Monday the EC charges are further proof of what the company has maintained for years: Intel illegally manipulates the chip market to maintain a monopoly position over competitors.

"There is an integrated scheme [by Intel] to boycott AMD," Ruiz said. "The microprocessor market as controlled by Intel harms consumers rather than serves them."

According to the EC charges, the Santa Clara, Calif.-based Intel conditioned rebates to original equipment manufacturers (OEM) on the OEM's buying most of their chips from Intel. The EC further maintains, in some cases, Intel made direct payments to OEMs to either delay or cancel the launch of a new product line featuring AMD chips.

In addition, the EC said Intel offered below-market prices on server chips in hopes of undermining AMD bids.

Intel on Friday categorically denied the charges, maintaining the microprocessor market is "functioning correctly" and that Intel's business behavior has been "lawful, pro-competitive and beneficial to consumers." Intel, which has 10 weeks to respond to the EC charges, was unavailable for comment on Monday.

Intel noted the case is based on complaints from a direct competitor rather than customers or consumers.

"Intel would like to position this as a dispute between two companies, but it is between the governments of Europe and Intel," Tom McCoy, AMD's executive vice president of legal affairs, said on the teleconference. "There are no trade secrets or intellectual property involved."

McCoy added Intel would have to fight the charges on "merit, not bullying or brawn." He further said, "The evidence is coming from Intel and the computer industry; not us."

The EC charges follow a multi-year investigation, including high profile raids of Intel's European offices in 2005. The raids followed a U.S. lawsuit filed by AMD against Intel.

In the lawsuit, AMD claims Intel paid companies like Dell and Toshiba not to do business with AMD, and paid Sony millions for exclusivity. AMD claims its share of Sony's business went from 23 percent in 2002 to 8 percent in 2003, to zero percent today.

AMD also charges that Intel forced NEC, Acer and Fujitsu into partial exclusivity agreements by offering rebates to those who agreed to limit or forgo AMD purchases. The chipmaker also said Intel paid NEC several million dollars for caps on NEC's purchases from AMD.

The Sunnyvale, Calif.-based AMD is seeking unspecified treble damages for the losses it claims it has sustained due to Intel's actions.

"[The EC charges] portend well for AMD's [U.S.] case," McCoy said.

Also in 2005, Japan's Fair Trade Commission ruled Intel violated the country's antitrust laws when it attempted to force full or partial exclusivity for Intel chips with five Japanese PC makers. In addition, South Korea currently has an active investigation underway about Intel's business practices.

McCoy said the series of legal actions and accusations is having an impact.

"There is increased global scrutiny on Intel," he said. "Global OEMs are taking advantage of the spotlight, particularly following Japan's ruling, raids by the EC and our lawsuit."