It's War! - AMD Files Antitrust Complaint Against Intel In U.S. Federal District Court

ShortyShorty Manchester, UK Icrontian
edited June 2005 in Science & Tech
AMD announced today that it has filed an antitrust complaint against Intel claiming the chip maker has unlawfully maintained its monopoly in the x86 microprocessor market by engaging in worldwide coercion of customers from dealing with AMD.
“Everywhere in the world, customers deserve freedom of choice and the benefits of innovation – and these are being stolen away in the microprocessor market,” said Hector Ruiz, AMD chairman of the board, president and chief executive officer. “Whether through higher prices from monopoly profits, fewer choices in the marketplace or barriers to innovation – people from Osaka to Frankfurt to Chicago pay the price in cash every day for Intel’s monopoly abuses.”
In X86 world, this IS news!

Source: AMD

Comments

  • ShortyShorty Manchester, UK Icrontian
    edited June 2005
    The 48-page complaint, drafted after an intensive investigation by AMD’s lead outside counsel, Charles P. Diamond of O’Melveny & Myers LLP, details numerous examples of what Diamond describes as “a pervasive, global scheme to coerce Intel customers from freely dealing with AMD to the detriment of customers and consumers worldwide.” According to the complaint, Intel has unlawfully maintained its monopoly by, among other things:

    * Forcing major customers such as Dell, Sony, Toshiba, Gateway, and Hitachi into Intel-exclusive deals in return for outright cash payments, discriminatory pricing or marketing subsidies conditioned on the exclusion of AMD;
    o According to industry reports, and as confirmed by the JFTC in Japan, Intel has paid Dell and Toshiba huge sums not to do business with AMD.
    o Intel paid Sony millions for exclusivity. AMD’s share of Sony’s business went from 23 percent in ‘02 to 8% in ‘03, to 0%, where it remains today.

    * Forcing other major customers such as NEC, Acer, and Fujitsu into partial exclusivity agreements by conditioning rebates, allowances and market development funds (MDF) on customers’ agreement to severely limit or forego entirely purchases from AMD;
    o Intel paid NEC several million dollars for caps on NEC’s purchases from AMD. Those caps assured Intel at least 90% of NEC’s business in Japan and imposed a worldwide cap on the amount of AMD business NEC could do.

    * Establishing a system of discriminatory and retroactive incentives triggered by purchases at such high levels as to have the intended effect of denying customers the freedom to purchase any significant volume of processors from AMD;
    o When AMD succeeded in getting on the HP retail roadmap for mobile computers, and its products sold well, Intel responded by withholding HP’s fourth quarter 2004 rebate check and refusing to waive HP’s failure to achieve its targeted rebate goal; it allowed HP to make up the shortfall in succeeding quarters by promising Intel at least 90% of HP’s mainstream retail business.

    * Threatening retaliation against customers for introducing AMD computer platforms, particularly in strategic market segments such as commercial desktop;
    o Then-Compaq CEO Michael Capellas said in 2000 that because of the volume of business given to AMD, Intel withheld delivery of critical server chips. Saying “he had a gun to his head,” he told AMD he had to stop buying.
    o According to Gateway executives, their company has paid a high price for even its limited AMD dealings. They claim that Intel has “beaten them into ‘guacamole’” in retaliation.

    * Establishing and enforcing quotas among key retailers such as Best Buy and Circuit City, effectively requiring them to stock overwhelmingly or exclusively, Intel computers, artificially limiting consumer choice;
    o AMD has been entirely shut out from Media Markt, Europe’s largest computer retailer, which accounts for 35 percent of Germany’s retail sales.
    o Office Depot declined to stock AMD-powered notebooks regardless of the amount of financial support AMD offered, citing the risk of retaliation.

    * Forcing PC makers and tech partners to boycott AMD product launches or promotions;
    o Then-Intel CEO Craig Barrett threatened Acer’s Chairman with “severe consequences” for supporting the AMD Athlon 64™ launch. This coincided with an unexplained delay by Intel in providing $15-20M in market development funds owed to Acer. Acer withdrew from the launch in September 2003.

    * Abusing its market power by forcing on the industry technical standards and products that have as their main purpose the handicapping of AMD in the marketplace.
    o Intel denied AMD access to the highest level of membership for the Advanced DRAM technology consortium to limit AMD’s participation in critical industry standard decisions that would affect its business.
    o Intel designed its compilers, which translate software programs into machine-readable language, to degrade a program’s performance if operated on a computer powered by an AMD microprocessor.
  • ShortyShorty Manchester, UK Icrontian
    edited June 2005
    http://www.amd.com/us-en/assets/content_type/DownloadableAssets/AMD-Intel_Full_Complaint.pdf

    Full complaint .pdf :eek::eek:
  • BuddyJBuddyJ Dept. of Propaganda OKC Icrontian
    edited June 2005
    Cool news. Can't wait to see how this turns out.
  • QCHQCH Ancient Guru Chicago Area - USA Icrontian
    edited June 2005
    Go AMD..... Go Get him!!!!! :cool:
  • KwitkoKwitko Sheriff of Banning (Retired) By the thing near the stuff Icrontian
    edited June 2005
    I'm listening to the webcast right now.
  • GargGarg Purveyor of Lincoln Nightmares Icrontian
    edited June 2005
    Booyakasha. Let Intel's dirty laundry be aired before the world :D
  • PirateNinjaPirateNinja Icrontian
    edited June 2005
    meanwhile cyrix shakes their fist in spite :D
  • TheBaronTheBaron Austin, TX
    edited June 2005
    they've done this kind of before, only this time they have some prove in the form of the JFTC
  • JengoJengo Pasco, WA | USA
    edited June 2005
    sweet!
  • ShortyShorty Manchester, UK Icrontian
    edited June 2005
    So come on then folks... lets get some thoughts, opinions. Read the .pdf .. what do you REALLY think!...!??
  • entropyentropy Yah-Der-Hey (Wisconsin)
    edited June 2005
    Hm. Hm hm hm. I wonder if they'll get anywhere with it. I hope so.

    This would drive prices DOWN, right? Or not, since Intel would (might) be forced to back off, would AMD jack up their prices if/when they get a bigger foothold?

    Edit:
    Ok, I'm actually reading it. I assumed it would be 90% legalbabble that I wouldn't understand, but it isn't. In fact, while I side with AMD, they almost sound... whiny. And for one, I wouldn't've put in things like:
    AMD wrote:
    Bested in a technology duel over which it long claimed leadership, Intel increased exploitation of its market power to pressure customers to refrain from migrating to AMD’s superior, lower-cost microprocessors.
    It sounds like AMD is getting somewhat high-and-mighty :-/
  • GobblesGobbles Ventura California
    edited June 2005
    yay and nay...

    who do you think is going to pay for this legal battle they are about to undertake...

    we are and the latest batch of new processors is the proof. I mean come on, when has AMD ever released a cpu that lists over 1000 USD.

    Im afraid at the pace they are going, in a year or so we will be calling them amdtel. :shakehead
  • JChretienJChretien Vancouver, BC, Canada
    edited June 2005
    woohoo go amd! :thumbsup:
  • GargGarg Purveyor of Lincoln Nightmares Icrontian
    edited June 2005
    If AMD plans on increasing profits by increasing market share, it sounds good to me. I just hope they don't increase their prices after that.

    We'll see how it turns out. The only thing I'm really looking forward to is if AMD gets more market share, maybe one day I won't have to spend any more of my time explaining to people that Intel is not the only way.
  • CyrixInsteadCyrixInstead Stoke-on-Trent, England Icrontian
    edited June 2005
    Gravite2090 wrote:
    meanwhile cyrix shakes their fist in spite :D

    :rant:

    ~Cyrix
  • TheBaronTheBaron Austin, TX
    edited June 2005
    entropy wrote:
    Hm. Hm hm hm. I wonder if they'll get anywhere with it. I hope so.

    This would drive prices DOWN, right? Or not, since Intel would (might) be forced to back off, would AMD jack up their prices if/when they get a bigger foothold?

    Edit:
    Ok, I'm actually reading it. I assumed it would be 90% legalbabble that I wouldn't understand, but it isn't. In fact, while I side with AMD, they almost sound... whiny. And for one, I wouldn't've put in things like:

    It sounds like AMD is getting somewhat high-and-mighty :-/
    they're not being high and mighty, they're just throwing in their punches when they can. the bottom line is, its not about which technology is superior, and the judge or whoever rules on this case will understand that

    while it may sound whiny, that's kind of the nature of the law in these kinds of things
  • lemonlimelemonlime Canada Member
    edited June 2005
    I think it is wrong that customers should be showered in nothing but Intel at the retail stores and by major companies like Dell. The latest generation of AMD processors are clearly superior to Intel's processors in many respects.

    Based on that article, I think it is dispicable how Intel financially punishes companies that do business with AMD. Whatever happend to healthy competition. I would bet that 90% of computer owners either have never heard of AMD (but certainly know of Intel), and believe that Intel processors and products are far superior in quality and performance to all other brands.

    My work uses Dell exclusively, and I can comfortably say that we will never benefit from any of AMD's superior products. Not by the choice of my company, but because of the things this complaint addresses.

    I personally think AMD has every right to persue this compaint, and I hope that the justice system gives them their full attention in the matter. I should be able to go to dell's website, and decide upon an AMD or Intel based optiplex or precision system, and Dell should not be financially punished for offering both choices to me. Clearly, these AMD chips are fantasic, and these retailers know it. By offering only intel, they are cheating their customers out of other quality leading edge products.
  • Unregistered
    edited June 2005
    Intel, Microsoft, Whats the diff?
    Ive always wondered, espscially lately, why we see many more Intel offers in the OEM arena. Now I see! AMD is superior and has been for quite some time! Intel has tried to squeeze them out the market and slow/disrupt their progress until they can get their collective s@#s together, with little/no success!
    Go get em, AMD, I will certainly buy an 64x2 processor now!
  • T-LAM-CT-LAM-C The Old-English "D"
    edited June 2005
    Intel, Microsoft, whats the diff...?
    Sorry, folks, that post is mine. I was a bit upset and too quick to post!
  • TheBaronTheBaron Austin, TX
    edited June 2005
    don't go buying AMD because of a lawsuit, buy AMD because they were better in the first place :)
  • MadballMadball Fort Benton, MT
    edited June 2005
    This will probably take many years to sort out. AMD has a very strong case against Intel, but Intel has much more money to pour into this. AMD needs the governments of the U.S. and EU to fully back them if they stand any chance of winning this.

    Good luck AMD. You have my support!
  • csimoncsimon Acadiana Icrontian
    edited June 2005
    Does anyone remember the antitrust suit that intel brought against amd years ago? Hell I do. At the time when intel was producing a 33mhz flagship chip (I know sounds funny don't it ;D) amd was touting 40mhz and that battle lasted only a little while before the suit was filed. I think amd got up to 80mhz if I'm not mistaken.
    At any rate if memory serves me correctly amd even stopped producing chips until the suit was over ...and the best part is that intel lost. The suit lasted for quite a number of years.

    Funny how things turn around! :thumbsup:
  • FAH_WWFAH_WW Training in Indianapolis, IN
    edited June 2005
    The only thing that may come out of this is a more 'level' playing field. I'm sure AMD will gain some marketshare out of this too.

    From AMD's perspective, their main goal is to get their brand recognised worldwide as a leading, high quality brand for x86 technologies.

    Their A64x2 is well nice :) - I would never discount Intel for a minute though, they've got vast, vast resource pools. And they have the Pentium M, which is an excellent CPU.

    I'm not an Intel/AMD anti/pro myself. I have numbers of both. The days of 'AMD sux' are over. But until AMD gets up to 40% market share (worldwide) they won't be able to afford an Intel Inside(tm?) type advertising campaign just yet. That however is the way open markets work.

    So even IF AMD does win this, Intel will probably still be dominant for a very long time to come ;)
  • CyrixInsteadCyrixInstead Stoke-on-Trent, England Icrontian
    edited June 2005
    What gets me is why Dell have to drage their heels in the dirt over ever accepting AMD as a product they can sell. The 64 processors are clearly superior and in the desktop market there's no reason why Dell shouldn't use AMD either.

    Is it because they're afraid of losing their golden deal with Intel that sees them getting components cheaply, maximising their profit? It's certanily not on technical merit or they would have started selling AMD processors long ago.

    ~Cyrix
  • ThraxThrax 🐌 Austin, TX Icrontian
    edited June 2005
    "Forcing major customers such as Dell, Sony, Toshiba, Gateway, and Hitachi into Intel-exclusive deals in return for outright cash payments, discriminatory pricing or marketing subsidies conditioned on the exclusion of AMD."
  • GobblesGobbles Ventura California
    edited June 2005
    I work with both, I am not a fanboy for either. P4 systems for me perform on par with AMD equivs.

    The trend I dont like, which has just started recently is with AMD releasing processors now and prices that are kinda above intels. I mean come on..

    http://www.newegg.com/Product/Product.asp?Item=N82E16819103544

    1000+??? yes its a top end processors.. but its still its over a 1000 dollars. Yes I know that Intel has 1 or 2 over 1000 dollars but you expect that from intel not from AMD
    :shakehead
  • lemonlimelemonlime Canada Member
    edited June 2005
    I agree that AMD seems to be straying away from the budget style that many people remember them for, but they still have MANY affordable procecssors avaliable. In my oppinion their top end chips deserve to be expensive. Why not, they are some of the fastest x86 processors avaliable. Intel on the other hand has a $1500CDN Extreme Edition that gets smoked by a $150 3200+ in just about every gaming benchmark that I've seen. The chips are clearly top performers. This goes for their FX series of chips too. For enthusiasts, overclocking the lower priced chips is where it's at, but if someone wants the fastest x86 on the market, then they SHOULD be paying 1K+ for it IMHO :D
  • danball1976danball1976 Wichita Falls, TX
    edited June 2005
    I guess after 30 years of Intel's bully tactics, AMD has had enough. AMD has been around 3 years longer than Intel (1969 vs 1972 I believe)
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