June 28, 2005 3:16 PM PDT

AMD files antitrust suit against Intel

Advanced Micro Devices has fired off a federal antitrust lawsuit against Intel, claiming that its rival has a monopolistic grip on the PC industry.

The suit, filed Monday in the U.S. District Court in Delaware, details alleged scare tactics and coercion that AMD claims Intel imposed on 38 companies, including large-scale computer makers, small system builders, wholesale distributors and retailers.

Hector Ruiz
Hector Ruiz

Intel processors account for more than 80 percent of the computers running x86-based chips, according to IDC. Those chips run many families of operating systems, including Microsoft Windows, Solaris and Linux. Even Apple Computer has announced that it will switch exclusively to x86 processors for running Mac OS software, beginning in 2006.

The suit is different from previous anticompetition fights between the two companies, according to AMD spokesman Mike Simonoff, in that the Sunnyvale, Calif.-based chipmaker has new information obtained from a recent investigation by Japan's Fair Trade Commission.

In that investigation, the agency said that Intel's Japan unit stifled competition by offering rebates to five Japanese PC makers--Fujitsu, Hitachi, NEC, Sony and Toshiba--which agreed not to buy or to limit their purchases of chips made by AMD and Transmeta.

"You don't have to take our word for it when it comes to Intel's abuses; the Japanese government condemned Intel for its exclusionary and illegal misconduct," Thomas McCoy, AMD's executive vice president of legal affairs and chief administrative officer, said in a statement.

News analysis
Coercion or circumstance?
AMD case could pry open lid
on Intel's high market shares.

In a statement, Santa Clara, Calif.-based Intel declined to comment on specifics of the case, saying that it will respond to AMD's antitrust allegations in court.

"We strongly disagree with AMD's complaints about the business practices of Intel and Intel's customers," the statement said. "Intel believes in competing fairly and believes consumers are benefiting from this vigorous competition. AMD has chosen, once again, to complain to a court about Intel's success, with a legal case full of excuses and speculation.

Regarding the Japanese investigation, Intel said at the time that it would abide by the Fair Trade Commission's recommendations but that it disagreed with the agency's findings and with its application of the law.

One analyst suggested that the lawsuit reveals a clue to AMD's market standing.

"Rightly or wrongly, AMD's move can be seen as a clever move to take advantage of a recent favorable ruling in Japan. However, the timing of the complaint and the company's tone of indignation (perhaps exasperation) give us a sense that AMD's traction in processors that they enjoyed last year is not meeting expectations," Hans Mosesmann, an analyst at investment firm Moors & Cabot, wrote in a research report Tuesday.

"It strikes us that AMD's approach is based on throwing everything but the kitchen sink at Intel in the hopes of getting something to stick," Mosesmann wrote.

AMD Chief Executive Hector Ruiz and some of his top executives are expected to speak about the charges during a conference call later Tuesday.

The two chipmakers have a contentious history. In 2000, AMD complained to the European Commission that Intel was violating European anticompetition laws through "abusive" marketing programs.

AMD sought to give the Commission access to documents produced in another Intel antitrust case, one filed by Intergraph. The Intergraph case was eventually settled.

The European Commission has continued to investigate Intel's marketing techniques.

Among the alleged abuses detailed Monday in AMD's 48-page complaint, the company said former Compaq CEO Michael Capellas complained that Intel withheld delivery of server chips in 2000. Saying "he had a gun to his head," he told AMD he had to stop buying its processors.

According to the complaint, Gateway executives recounted to AMD that their company paid a high price for even its limited AMD

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Intel no stranger in court room appearences around the world.
If the pattern continues, they will pay up to shut up as usual.
Ask our friends in Japan and Europe. Go AMD!
Posted by 4nchip (23 comments )
Reply Link Flag
It seems you're right.. 1.25 billion.
Posted by sinbadbuddha (5 comments )
Link Flag
I hope this leads to an AMD based Mac
With Apple's announcement that it is switching to Intel chips, I hope that Apple does not exclude AMD or that Intel does not force Apple to exclude AMD.

I think a Turion based PowerBook would be very appealing and would be my next computer purchase if it becomes available. Can anyone who knows hardware tell me if Athlon or Turion would be a good fit with the Mac?
Posted by Juster444 (33 comments )
Reply Link Flag
I want to move to MAC, if it's on AMD
Only thing I need is AMD-based MAC. I'm using AMD and Intel processors both from 1999, and to me AMD always outperforms intel. it's true in my case - always - in games, office applications etc.
So I really don't want to use Intel-based MAC. The day Apple start selling AMD-based MAC, I'll buy it regardless of money.
Posted by arijit.2612 (1 comment )
Link Flag
Obvious that Intel is using high-handed tactics
You can't tell me that Dell is simply following the market's demand when they refuse to buy so much as 1 AMD processor.

Sorry, but AMD is much more mainstream (and in demand) than that.

Obviously Intel is giving them something (or threatening them) to prevent even limited AMD CPU purchases.

And why wouldn't AMD fight? Of course they have to fight - they're the underdog. With a better product, yes - but still only 25% to Intel's 75%. Of course they have to be feisty and hope that "something will stick". They'd be foolish and cowardly not to.

Posted by AgeOfPenguins_com (26 comments )
Reply Link Flag
3dguru will prove you wrong. I used to like AMD too, but now I am an Intel user because the chips they produce simply out perform the AMD chips. Look at the results of the tests. Also, consider that more games are designed specifically for AMD. I don't care if you feel they are being shut out, its a free market economy or at least it used to be. All I know is at the end of the day when I spend my money its going to Intel for better performance no matter what reason. Don't bother arguing morals here, just look at the bench marks and you will see AMD can't compete. It has complained before but still cant produce a product to speak for itself (AMD). Face it, if you were the head of Intel would you not want exclusive rights to Apple and Dell? It is a business and they are in it for the money. How they get that money is arguable and I really don't care that's a matter of opinion and everyone has the right to their own so I'm not saying anyone is wrong in that regard, but when the chips are compared, saying that AMD is faster or as fast isn't true.

Competition is good but when your beat your beat AMD. I'm glad to see so many die hard AMD users though. I was there once, I built a Intel system and I was converted in about 30 seconds. Speed, efficiency, overall performance increase over AMD. But I will say AMD is cheaper so for those of you that can't afford Intel, AMD is still a good product, but not great.

Enjoy arguing the point everyone.
Posted by Neo47 (2 comments )
Link Flag
1. it is true that Intel seem to outperform AMD at the moment
2. That wasn't the case when this case was filed, and in terms of opinion among the general population, they are still *very* competitive. Many people are still under the impression that AMD outperform Intel, so if Intel did not abuse the market, there is no reason at all why so many companies should not support AMD. AMD can *definitely* compete, and has done for two decades now, against massive odds.
3. If AMD and Intel's market shares were proportional to their processor quality (and legal marketing techniques), they would be about equal, and AMD would have greater resources to build competitive processors.
4. The whole point of a 'free market' is to encourage consumer choice of competitively priced products (and services) of competitive quality. If your 'free market' does not achieve it, it is pure, useless idealism.
5. This case is not about morals! It is about a healthy market!
Posted by sinbadbuddha (5 comments )
Link Flag
Dells and Apples
Of the many conspiracy theories floating out there in the web, most of the Intel-related ones centered around Dell and Apple.

Why is Dell adamantly sticking to Intel instead of branching out to AMD?
That's a simple answer to figure out: Price, Price, AND Price.
1) Dell is one of Intel's LARGEST customers, and as such, would most likely get a sizeable volume discount.
2) Dell needs to keep support costs DOWN. Supporting two platforms will double the cost of engineering and technical support for Dell - something they don't want to do.
3) Dell's Just-In-Time inventory control is very demanding, and that kind of demand is probably something AMD cannot match at the present time.
4) Or, maybe Dell is an Intel subsidiary! <Gasp!> BTW, this is a joke for you conspiracy theorists.

Conclusion: The fact that Dell is still making tons of cash, compared to HP (who sells a lot of AMD systems), is proof positive that the first three points made above are contributing factors to why Dell has decided to stay with Intel - for the time being. No consipracy theories, or illegal monopolistic activities here! Just plain business sense.

As to why Apple went with Intel.
1) It may surprise many people posting here, but it was Intel, NOT AMD who courted Apple all these years to switch to Intel chips.
2) It was Intel, NOT AMD who built the relationships, and the deals that swayed Apple over, not AMD. Read it on any internet publication and you well see that Intel had been courting Apple for YEARS.
3) Any technological transition is fraught with perils. The transition from a PowerPC architecture to an Intel EMT64 x86 architect is hard enough to do - without throwing a lot more variables into the mix. So, it makes sense that Apple chose an exclusive chip vendor.
4) Apple is soon to be bought out by Intel <Gasp!>, so they must use Intel chips. BTW, this is ALSO a joke.

Conclusion: Unlike the welfare system, Intel EARNED the Apple contract by offering them a compelling product line, volume-discounts, technological assistance, as well as many other intangibles that made a great deal of sense to both parties.

All of these facts are available in the net for verification - you just have to read the articles objectively.

etc. etc. etc.
Posted by Tex Murphy PI (165 comments )
Reply Link Flag
Thank you! I'm glad to see someone else that is here to debunk these issues of "conspiracy" and "under handed tactics" by Intel. AMD is a bad sport. They seem to always complain when its another year they fail to make much money.

For those of you that say AMD is more advanced, have you seen AMD's plans for 45 nm? 32nm? N0?!?!? That's because they are struggling. They do have 45nm set to release within the year (some years after intel's first 45nm) and they are set to relase 32 nm in 2011 which intel plans to relase in Q4 of 09. Check the press room links on the respective sites and you will see what I am referring to. AMD can't manage to keep up with Intel now and what is wrong with Intel capitalizing on that? ITS BUSINESS THEY ARE IN IT FOR MONEY NOT FRIENDSHIP.

Thanks again for the great post. I hope the courts realize what AMD is just sour.
Posted by Neo47 (2 comments )
Link Flag
Do some background research. I will give an example of an Intel tactic, one which might be less hard to believe for those of you who like to laugh at AMD 'conspiracy theories', even when they are supported in court. First though, consider: Intel has recently settled with AMD for 1.25 billion USD, despite having invested 116 million USD in the court case, so even they seem to believe that a defense is untenable.
Anyway, here goes, do your research before you comment:: Intel produces the most competitive C/C++/Fortran compiler for Windows, Linux and Mac systems, consistently outperforming other mainstream compilers, like Visual C++, Borland's compiler and GCC in benchmarks. However, Intel's compilers are artificially engineered to compile code that runs badly on AMD chips. The effect of this on the market is to fool people into believing that Intel's chips outperform AMD's (more substantially than they do, if that's how you feel); imagine if Microsoft engineered Windows to run Sun Micro software badly, and as a result people came to believe Java and OpenOffice were terribly buggy! The effect on the market would be dreadful; Microsoft could push its prices up, Java would be less maintained because of loss of resources, etc. As Neo47 rightly said, 'don't bother arguing about morals'. Don't bother crying 'bad sport,' then.
Posted by sinbadbuddha (5 comments )
Link Flag
Oh, forgot to mention, the Intel C++ compiler thing is described (not in detail) in the AMD complaint, but I learned about it from other sites. You can look up exactly how Intel compilers generate anti-AMD code with a quick google search.
Posted by sinbadbuddha (5 comments )
Link Flag
No More AMD For Me!!!!!!
For twenty years I have used Intel to drive my machin es. Finally, because of 64-bit processing, I buy an ASUS motherboard with the AMD Athlon 64. Yesterday my house took a minor power hit. Of the four machines I had online, the AMD was the only one to cook. I always use ASUS motherboards so I have to believe AMD's architecture has to be weaker than Intel's. I'm just lucky I instituted my first real backup system last week in all those twenty years. But discussing backups is for a different forum. And life goes on....

In Tucson
Posted by jackintucson (6 comments )
Reply Link Flag
Left Something Out
Maybe Intel has a 80% market share because they build a better widget???
Posted by jackintucson (6 comments )
Link Flag
Learn more about computers first
Fact that you had power outage got nothing to do with AMD or Intel cpu's but inside your head.I saw many Dell PC going bad electricaly not due to using Intel cpu but using weak and bad power suplys which didn't provide right woltage under stress resulting in failure of computer.
Posted by (32 comments )
Link Flag
You can't blame AMD for your own faults
You can't blame a fried CPU on the maker of the CPU. It's your fault for not buying a surge protector. They are cheap, compared to the cost of a processor (let alone the rest of your computer).

Also, CPUs are extremely delicate components. You must have figured that out by now. An Intel CPU would fare no better either.
Posted by hion2000 (115 comments )
Link Flag
Fried my AMD?
Well, I haven't owned an Intel for awhile now, but I can say that my AMD procs have survided several brown outs, surges, spikes, and a surge that melted wires in the wall (transformer blew). I can't say the same for the the Intel procs in my office. I will say this I doubt it had anything to do with the procs. The Intels were running cheep PS that came with the case and the AMD's had Antec PS. I didn't build the Intel systems.

I have to admit your logic is a lot flawed. But, hey, stay with Intel. Both are perfectly good procs. Two very good companies, one just likes to give away money to beat the competition because the can't compete with performance and cooling anymore.
Posted by System Tyrant (1453 comments )
Link Flag
AMD don't normally Fry
1. Your experience could have had a much better ending if you were using UPS that typically will cover your monetary loss.
2. On the other hand I have built at least 10 AMD based systems and the only proceesor I've had fail was when I accidently dropped the cooling fan on it and it cracked the chip.
3. If you would check out the recent articals on P-4 developement you would quickly learn that Intel has hit the wall and is unable to compete as their power consumption (heat), pipeline length have resulted in less efficiency as they try to continue to go to higher clock frequencies.
4. If you think back a bit you might have noticed that while Japan (Honda etc.) and the Europeans were busy building the cars with high tech features we all wanted the Detroit bunch sat back cashing in on their old designs misreading the trends which has lost them a lot of market share.
5. So now you have Microsoft desperately clinging to a boat full of holes (Win XP)developing faster than they can plug them. They have made a lot of security mistakes and their only hope is that they can write a security based operating system and then get us all to buy it.
6. Intel is in the same boat. Only difference is that they have coersed the majors into supporting their massive market share. Paying them off.

I have 2 Intels and 8 AMD's. It started that way because Intel Inside was way overpriced.
Posted by (2 comments )
Link Flag
Intel is a superior company
Intel is continuing to develop devices and motherboards. They are not too big to answer a Small user question!!
The idea that something that is said in japan or europe can be used in court in this country against a taxpaying American Co. is ridiculous and unpatriotic!
Posted by nitehawk10 (1 comment )
Reply Link Flag
Man your funny.
Oh, you were joking right? Intel is a good company, but like Microsoft they have chosen to compete by unethical tactics. I figure they will loose this case to some degree, but I don't think it will have a major impact on the market unless they are not allowed to offer deep discounts to those who are willing to only sell Intel procs.

I know you didn't say anything about their products, but I just want to say anybody who thinks Intel is winning in 'who build the best proc' category isn't keeping up with technology. AMD is leading, just not in sales. Sales doesn't equal best product, just best marketing.
Posted by System Tyrant (1453 comments )
Link Flag
Are you trolling or just stupid?
Posted by sinbadbuddha (5 comments )
Link Flag
Never AMD for me
AMD what a bunch of sore losers, can't come up with a half way
decent chip
that works well with "all" applications not just some applications.

Business is tough get into the game or get out. their customer
service stinks too, At least Apple and Intel build a better brand
and stories like this make me dislike the AMD brand even more.
Posted by (3 comments )
Reply Link Flag
If a program works with an intel x86 it will work with AMD.

There is a reason AMD is the #1 choice for high end gaming systems, stability, cooling, price, availability. A system like that still works well as a server or pretty much anything else you want to use your PC for.

Perhaps not the high end server/cluster market but those don't use desktop chips.
Posted by Bill Dautrive (1179 comments )
Link Flag
Do you not know that:

AMD is the leader in the 64bit architecture?
AMD CPUs are cheaper and yet they are far more efficient?
AMD CPUs run EVERYTHING that Intel CPUs can?

"Business is tough"
Sure, you wouldn't say that if you weren't on the monopolistic side. Read the damn lawsuit. I know you haven't.
Posted by hion2000 (115 comments )
Link Flag
You know not of what you speak.
Intel doesn't exactly have a halo over their head either. As a matter of fact none of the Fortune 500 got where they are by playing by the rules.

Todays AMD processors are, MIPS per watt/dollar, better performers than Intels and that's a fact.

Intel hit a wall with their "more Mhz is better" campaign where AMD took the route of optimizing their processors and now guess who is following who.
Posted by (56 comments )
Link Flag
I find it amusing that all fanatics fight over companies like it was a religious debate over who's god is better.

AMD is better, Intel is better. I know this comes as a suprise, but both are good, but at this moment AMD is leading in performance. That doesn't mean they win every benchmark it just means they win the majority of them. Truth be told though the margin between the two companies is slight, so even that is a moot point. I have been buying AMD because they are cheeper, cooler, and perform on par with or better than Intel. If you guys don't believe me go to any hardware review site and see for yourself. Even tomshardware.com is saying that AMD is better. I have always thought tomshardware.com was paid off by Intel because their benchmarks always seam to favor Intel when everybody elses favored AMD.
Posted by System Tyrant (1453 comments )
Link Flag
Want the Real Story Go to 4ntv.com
Check out Intelamac.com. Dellamac.com etc,etc
Posted by 4nchip (23 comments )
Reply Link Flag
This is antitrust case
Intel is not playing fair by using various tactics to swing companies to use Intel or stay with Intel cpu's which is illegal.
Posted by (32 comments )
Reply Link Flag
AMD will always have a niche market to fall back on
Posted by wazzledoozle (288 comments )
Reply Link Flag
Too BIAS!!!
You may have installed AMD wrongly as you have been using Intel chips for a long time... Your a Big Liar!!!!
Posted by dpro369 (1 comment )
Reply Link Flag
Caveat emptor : It's no laughing matter when companies are subject to anti-trust suits from the European Anti-Trust Commission. MSFT was recently fined $1.4 billion last February after a prolonged hearing and it's still going on with daily fines; even a Japanese zipper company was fined $250 million couple of years ago when the Euro was weaker. By virtue of Intel's massive share of the market, the EATC may favor AMD's complaint. An amber warning for shareholders, while AMD for now is having the upper-hand on the matter.
Posted by oroblram (21 comments )
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