June 28, 2005 3:16 PM PDT
AMD files antitrust suit against Intel
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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.
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.
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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