MESSAGE
| DATE | 2005-06-28 |
| FROM | From: "Inker, Evan"
|
| SUBJECT | Subject: [NYLXS - HANGOUT] Update: AMD files broad antitrust suit against Intel
|
Update: AMD files broad antitrust suit against Intel
Rival is accused of coercing PC vendors worldwide into using only Intel
chips
News Story by John Blau
http://www.computerworld.com/governmenttopics/government/legalissues/story/0
,10801,102830,00.html?source=NLT_AM&nid=102830
JUNE 28, 2005 (IDG NEWS SERVICE) - Advanced Micro Devices Inc. has filed a
wide-ranging antitrust suit against Intel Corp., accusing it of maintaining
its monopoly in the PC processor market by illegally coercing customers
around the world into using its products, AMD announced today.
The suit, filed in the U.S. District Court for the District of Delaware,
identifies 38 companies on three continents that were allegedly coerced by
Intel, including large-scale computer makers, small system builders,
wholesale distributors and retailers, according to a statement from AMD in
Sunnyvale, Calif.
The 48-page complaint (download PDF) alleges that Intel used illegal
subsidies to win sales and, in some cases, threatened companies with "severe
consequences" for using or selling AMD products.
A spokeswoman for Intel in Hong Kong said the company had yet to receive
formal notice of the compaint from AMD or the U.S. courts.
"We won't have any comment until we do," said Intel spokeswoman Laura
Anderson.
The case pits Intel, the world's largest manufacturer of microprocessors,
against its main rival in what could be a long and tough legal fight.
AMD's litigation follows a recent antitrust investigation of Intel by the
Japan Fair Trade Commission (JFTC). In March, the JFTC found that Intel had
abused its monopoly power to exclude fair and open competition in the
Japanese microprocessor market. The result was to substantially restrain
competition, the JFTC said.
Intel's Japanese subsidiary agreed in April to refrain from several types of
business practices, although it also said it disagreed with the JFTC's
findings.
The European Commission has also said that it is pursuing an investigation
against Intel for possible antitrust violations and that it was cooperating
with the Japanese authorities.
AMD's complaint lists several examples of how Intel has allegedly abused its
dominant market position. One of them claims that Intel forced major
customers, such as Dell Inc., Sony Corp., Gateway Inc. and Hitachi Ltd.,
into exclusive deals in return for outright cash payments, discriminatory
pricing or marketing subsidies.
Intel has also been investigated by U.S. antitrust regulators, although the
charges were different in nature. The U.S. Federal Trade Commission filed
suit against the chip maker in 1998, accusing it of using its market
dominance to coerce trade secrets from some of its customers.
According to the FTC, Intel threatened to withhold information about future
chips from three vendors -- Digital Equipment Corp. and Compaq Computer
Corp. (which are now part of Hewlett-Packard Co.) and Intergraph Corp. --
unless those companies agreed not to sue Intel over any potential patent
violations. The FTC said such strong-arm tactics were against the law when
practiced by a company as dominant as Intel.
Intel eventually settled the case in March 1999. It agreed to refrain from
certain practices but denied any wrongdoing.
Another complaint involves the European joint venture Fujitsu Siemens
Computers (Holding) BV, which was once a mainstay for AMD's desktop
business, with AMD chips powering more than 30% of Fujitsu Siemens' consumer
PCs, according to the complaint. In early 2003, Intel offered Fujitsu
Siemens a "special discount" on its Celeron processors. Fujitsu Siemens
accepted the offer in exchange for hiding its AMD computers on its Web site
and removing references to AMD-powered products from its retail catalog,
according to AMD.
Intel also managed to persuade Fujitsu Siemens to limit the markets in which
it sells AMD-powered PCs, according to the complaint. Its parent, Fujitsu,
currently sells an AMD-equipped notebook, the Lifebook S2010, but only in
the U.S. and Japan. Fujitsu Siemens declined AMD's plea to offer the machine
in Europe as well, AMD said.
AMD's share of Fujitsu Siemens' business recently fell below 30% for the
first time in four years, the company said.
Fujitsu Siemens is also among the companies that reported being intimidated
from participating in the Opteron 64 launch in 2003, according to AMD. The
others include Taiwan's Micro-Star International Co. Ltd., Atipa
Technologies and Solectron Corp.
Intel representatives told Fujitsu Siemens' executives in the weeks
preceding the Opteron launch that if they attended, they would be the only
Tier 1 computer maker to do so because all the others would back out,
according to the complaint. With the exception of IBM, Intel was right.
IBM was another target of what AMD calls "Intel's relentless campaign to
undermine marketing efforts by its one remaining competitor." IBM pulled its
AMD-powered computers from the 2004 Palisades eServer and PC Show citing a
contractual agreement with Intel that prohibited IBM from endorsing
competing products, according to the complaint. And at last year's
SuperComputing Show, an annual conference devoted to high-performance
computing, Intel offered two other computer makers money to remove AMD
systems from their booths, according to AMD.
AMD also claims that it has been entirely shut out from MediaMarkt, Europe's
largest computer retailer, which accounts for 35% of Germany's retail sales.
Intel provides MediaMarkt $15 million to $20 million of market development
funds annually. Since 1997, Media Markt has carried Intel computers
exclusively.
Mari Hayashi, an AMD spokeswoman in Tokyo, said AMD would discuss the suit
further in a conference call in the U.S. later today.
Dan Nystedt in Taipei contributed to this report.
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