AMD files antitrust suit against Intel

Under the Japanese order, Intel is banned from requiring customers to use its chips 100 percent of the time, though PC makers can do so if they choose. Intel also can’t require customers to use its chips exclusively or near exclusively across product cycles, which typically span three or four months, and instead must submit a bid for each cycle.

But the actions weren’t limited to Japan, AMD said.

When AMD tried to convince Hewlett-Packard Co. to use AMD chips in its commercial desktop line, the company demanded $25 million to compensate for Intel’s expected retaliation. AMD also said it has had problems reviving its relationship with Gateway Inc.

“According to Gateway executives, their company has paid a high price for even limited AMD dealings,” the suit reads. “They claim that Intel has beaten them into ’guacamole’ in retaliation.”

AMD also claims potential deals with Dell Inc. and International Business Machines Corp. also have been thwarted by Intel’s tactics.

AMD also claims Intel went so far as to disrupt the launch of its Opteron server chip in April 2003 by pressuring computer makers to withdraw from the event.

The European Commission has said it is pursuing an investigation against Intel. The U.S. Fair Trade Commission also has investigated Intel’s practices but said in 2000 that it was closing the case and taking no action against the world’s largest chip maker.

Rick Whittington, a Caris & Co. analyst, said the legal action has been expected and breaks no new ground.

“The timing of this suit, in our view, is Sales and Marketing 101,” he said in a research note. “Get the attention of the customer as market demand heats up and you have sizable supply coming down the pike. Put the competitor, to whatever extent possible, on the ropes and force them to adopt less aggressive sales tactics, if even marginal.”

Shares of Intel rose 27 cents, or 1 percent, to $26.13 in trading on the Nasdaq Stock Market, while shares of AMD rose 52 cents, or 3.1 percent, to $17.19 on the New York Stock Exchange.Chip maker Advanced Micro Devices Inc. has filed an antitrust lawsuit against Intel Corp., alleging its competitor coerces companies to keep them from using AMD-manufactured microprocessors.

The suit, filed Monday in U.S. District Court in Delaware, alleges Intel has bullied 38 companies, including large-scale computer-makers, wholesale distributors and retailers, to secure a monopoly in the highly competitive x86 microprocessor market. (MSNBC is a Microsoft-NBC joint venture.)

The microprocessors run the Microsoft Windows, Solaris and Linux families of operating systems. Santa Clara-based Intel's current market share of x86 microprocessors is about 80 percent of worldwide sales by unit volume and 90 percent by revenue.

"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, president and chief executive officer of the Sunnyvale-based AMD.

He added that "people from Osaka to Frankfurt to Chicago pay the price in cash every day for Intel's monopoly abuses."

An Intel representative could not be reached before business hours Tuesday.

In March, Japan's anti-monopoly watchdog, the Fair Trade Commission, issued a warning to Intel, saying that the company was curbing competition in the microprocessor chip market by pressuring Japanese clients to buy its chips.

Intel denied the allegations but said at the time that the changes outlined in the agency's proposed cease-and-desist order would not affect its ability to compete in the Japanese marketplace.

The European Commission has said it is pursuing an investigation against Intel for similar possible antitrust violations and is cooperating with Japanese authorities.

According to the complaint, Intel has forced major customers such as Dell, Sony, Toshiba, Gateway and Hitachi into exclusive deals in return for cash payments and other deals. It also allegedly paid Sony millions of dollars for an exclusive deal on microprocessors and threatened retaliation against customers for introducing AMD computer platforms into their products.

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