AMD files antitrust suit against Intel

stubeeef

macrumors 68030
Original poster
Aug 10, 2004
2,702
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Link
NEW YORK (Reuters) - Advanced Micro Devices Inc. (NYSE:AMD - news) has filed an antitrust lawsuit charging that Intel Corp. (Nasdaq:INTC - news), its chief competitor, used everything from threats to kickbacks in illegally building the world's largest computer-chip business.

AMD's 48-page lawsuit, filed in U.S. District Court in Delaware, is the latest shot in a long battle between the two rivals and comes after a recent ruling by Japanese antitrust authorities that Intel had violated anti-monopoly laws and stifled competition with AMD.

The current lawsuit expands those charges, alleging that across three continents Intel coerced 38 companies, including such household names as Dell Inc. (Nasdaq DELL - news), Sony Corp. (6758.T) and Gateway Inc. (NYSE:GTW - news), to win business over a period of years.

"Everywhere in the world, customers deserve freedom of choice and the benefits of innovation -- and these are being stolen away in the microprocessor market," Hector Ruiz, AMD chairman, president and chief executive, said in a statement on Tuesday.
In one instance, AMD charged, former Compaq Chief Executive Michael Capellas said in 2000 that "he had a gun to his head" and would have to stop buying from AMD. He said Intel was withholding delivery of critical server chips because of the volume of business he was doing with AMD, according to the lawsuit.

In another, Gateway executives told AMD that Intel had "beaten them into 'guacamole"' in retaliation for doing business with AMD, according to the papers.

AMD charges that even retailers were strong-armed by Intel. It said Best Buy Co. Inc. (NYSE:BBY - news) and Circuit City Stores Inc.(NYSE:CC - news) were "effectively" required to stock Intel computers "overwhelmingly or exclusively," limiting choices to customers.
 

Mac-Xpert

macrumors 6502
Dec 18, 2003
308
0
The Netherlands
In one instance, AMD charged, former Compaq Chief Executive Michael Capellas said in 2000 that "he had a gun to his head" and would have to stop buying from AMD.
Gateway executives told AMD that Intel had "beaten them into 'guacamole"' in retaliation for doing business with AMD
I didn't know Intel was a italian mob company
:eek:

Apple better watch out particularly if they ever want to do business with IBM or Freescale in the future again. :p
 

michaelrjohnson

macrumors 68020
Aug 9, 2000
2,174
1
53132
This is an interesting story. I wonder how it will pan out.

Is AMD just crying foul becuase their business isn't so hot? Or perhaps Intel did something (close to) what they are accused of.

I hope it doesn't affect future Mactel machines, that's for sure.
 

iMeowbot

macrumors G3
Aug 30, 2003
8,643
0
Josh396 said:
I wonder if Apple could be involved in this somehow.
Not at the moment. AMD have posted an open letter and the complaint itself. The deals they specifically mention in their initial complaint are Hewlett-Packard, Dell, IBM/Lenovo, Fujitsu/Siemens, Acer, Toshiba, NEC, Sony and Gateway/eMachines. Oddly, there are several sellers of AMD-based systems in their list.
 

jared_kipe

macrumors 68030
Dec 8, 2003
2,967
1
Seattle
Mac-Xpert said:
I didn't know Intel was a italian mob company
:eek:

Apple better watch out particularly if they ever want to do business with IBM or Freescale in the future again. :p
Else Jobs wakes up with a G4 logic board in his bed. :eek:
 

tsk

macrumors 6502a
Jan 14, 2004
642
0
Wisconsin
Is Intel actually a monopoly though? I don't know their current marketshare but I'm guessing it's "only" in the 75% area.
 

iMeowbot

macrumors G3
Aug 30, 2003
8,643
0
tsk said:
Is Intel actually a monopoly though? I don't know their current marketshare but I'm guessing it's "only" in the 75% area.
According to the AMD complaint, Intel have 90% of the market in dollars, 80% in units.
 

MongoTheGeek

macrumors 68040
Raven VII said:
What happens if AMD wins this one? What can the government do?
There are a lot of things that can be done.

I don't think the law allows for jail time. There are fines, censure and condemnation.

3 antitrust suits come to mind. AT&T, IBM and Microsoft.

IBM was forced into some consent decrees which wound up crippling its computer operations and are responsible for it current situation. The Hardware people could talk to the software people or the peripheral people. There was actually better cooperation between IBM and 3rd party providers than there was between business units. This was enforced by audits and anal probes.

AT&T was split into 9 companies. Many have been renamed. A couple are in the process of merging (!) In general they have almost all done well, probably better than they would have as a whole.

Microsoft was forced into a consent decree that said they would ship a version of windows 98 without Internet Explorer...

If something like IBM happens to Intel look for wild marketing plans based on physically impossible chip designs, insane production faults, and 2*2 being officially redefined as 5... Truly dark days.

In the AT&T scenario Intel would be split into a sales marketing company that would buy chips wholesale from the foundry and resell them. The foundry would make chips under license from a design company. The marketing company would own the Intel and Pentium names as well as the rest of the trademarks. It would also have the bulk of the cash. The foundry would own the chip buildings and process patents. The design company would have a chunk of the cash and design patents and copyrights. There might even be 2 or 3 design companies based on different chip families with cross-licensed IP. This would lead to a lot of innovation and far fewer marketing shenanigans.

In the microsoft scenario Intel would stop providing marketing money for companies that only ship computers containing the Pentium3...

Looks like the MS scenario will happen
 

greg555

macrumors 6502a
Mar 24, 2005
644
7
Canada
Keep an eye on overclockers.com. The owner usually writes well
thought out articles on AMD vs Intel issues. He is saying he will
have some thoughts on it in a few days. (You may want to avoid
any Apple articles you see there unless you like to have you blood
boil )

Cheers - Greg