AMD's lawsuit says that Intel's practices of rebates and subsidies, combined with punishment for PC makers who buy too many AMD chips, has harmed competition and restricted innovation




AMD has filed a lawsuit against Intel in the American courts accusing the chipmaker of forcing major customers to accept exclusive deals and withholding rebates and marketing subsidies to punish those customers who, it says, buy more AMD processors than agreed with Intel.

In the lawsuit, which was filed in the US District Court of Delaware, AMD charges that Intel also threatens retaliation against customers doing business with AMD, has established quotas keeping retailers from selling the computers they want, and forces PC makers to boycott AMD product launches.

In the 48-page filing, which has an exasperated tone, AMD highlights its efforts — most of which it claims were rebuffed — to persuade major original equipment manufacturers to use its processors. For instance, when AMD offered HP, the biggest computer maker in the world, a million processors for free, HP took only 160,000, said AMD.

In an open letter, AMD chief executive Hector Ruiz explained the lawsuit, saying: "Our competitor has harmed and limited competition in the microprocessor industry. On behalf of ourselves, our customers and partners, and consumers worldwide, we have been forced to take action."

For most competitive situations, this is just business, said Ruiz. "But from a monopolist, this is illegal."

Ruiz went on to say that Intel's behaviour is much more than meets the eye. "You may not have been aware, but Intel's illegal actions hurt consumers — everyday. Computer buyers pay higher prices inflated by Intel's monopoly profits. Less innovation is produced because less competition exists. Purchasers lose their fundamental right to choose the best technology available."

The lawsuit follows a call from Japan's Federal Trade Commission earlier this year for Intel to halt the practice of requiring PC makers to limit the use of competitors' chips in exchange for monetary rebates.

Intel, which accepted the recommendations, noted it disagreed with the agency's findings of fact underlying their allegations and the application of law in the recommendations.

http://news.zdnet.co.uk/hardware/chips/0,39020354,39205918,00.htm

An intresting move. A million CPUs for free? And HP didn't accpet?!

Press Conference Audio (only good for the next week): http://www.amd.com/breakfreewebcast

PDF of lawsuit: http://www.amd.com/us-en/assets/content_type/DownloadableAssets/AMD-Intel_Full_Complaint.pdf

Go AMD!

AMD is making a perfectly fair move. ;) I agree with what they are doing.

I'm sick of the Intel inside thing! Down with Intel! Down with Intel! ...

Maybe I got a little carried away ;)

I am an AMD fan - both my home PCs are AMD. But they complain about Intel being anti-competitive, then GIVE AWAY CPU's? :eh:

Giving things away for free to be part of bundled packages can also be seen as anti-competitive. Ask M$ re the media player issue.

2 comments:

1) So long as companies like 'Microsoft' can monopolize, so too will smaller companies like Intel.

2) Maybe Intel is just plain better. I wouldn't take a free AMD if I could afford an Intel - computer.

Anyway, crying over it is stupid. Especially after trying to give it away for free & still getting turned down. Of course, this is America - so they will probably win.

I am an AMD fan - both my home PCs are AMD. But they complain about Intel being anti-competitive, then GIVE AWAY CPU's? :eh:

Giving things away for free to be part of bundled packages can also be seen as anti-competitive. Ask M$ re the media player issue.
All businesses give stuff away, normally "buy X, get Z free" offers which the sales executives are authorised to offer at their own discretion, but also as free samples.

Because every vendor in the free world behaves that way, I do not think anyone can complain.

The Microsoft issue is different, and boils down to them monopolising the boot loader software. See the Be vs. Microsoft case for more details.

http://news.zdnet.co.uk/hardware/chips/0,39020354,39205918,00.htm

An intresting move. A million CPUs for free? And HP didn't accpet?!

Short term gains against long term negatives. Maybe other companies wouldn't be too impressed with them breaking an agreement.

Intel chief executive Paul Otellini on Wednesday defended his company against new legal attacks from AMD.

AMD filed a lawsuit against Intel on Monday in US District Court in Delaware. The rival chipmaker claims that Intel is using monopolistic business practices, such as threatening retaliation against customers who do business with AMD. AMD is asking the court to impose punitive damages.

The man who recently replaced Craig Barrett as Intel's CEO said his company has been involved in other antitrust suits, has faced similar issues before and expects to come out on top of this one as well.

"Intel has always respected the laws of the countries in which we operate," Otellini said in a statement. "We compete aggressively and fairly to deliver the best value to consumers. This will not change."

Intel was able to stare down an antitrust lawsuit Intergraph filed against the chipmaking giant back in 2000. The case was eventually settled.

After a raid on its offices in Japan, Intel agreed to work with Japan's Fair Trade Commission (JFTC), which accused Intel of offering rebates to five Japanese PC makers — Fujitsu, Hitachi, NEC, Sony and Toshiba — in exchange for refusing to buy or to limit their purchases of chips made by AMD and Transmeta.

So far, no trial date has been set. Lawyers predict the lawsuit could take about 18 months to go to trial.

Meanwhile, AMD began running full-page ads in newspapers today to outline the reasons for its antitrust lawsuit and to issue a call to action.


http://news.zdnet.co.uk/hardware/chips/0,39020354,39206451,00.htm


It gets even more intresting.

@ainwood: If offered a million CPUs for free wouldn't you take up the offer?

http://news.zdnet.co.uk/hardware/chips/0,39020354,39206451,00.htm


It gets even more intresting.

@ainwood: If offered a million CPUs for free wouldn't you take up the offer?
but that means they have to make 1 million amd PCs... and intel will get mad and take away discounts if they do

http://news.zdnet.co.uk/hardware/chips/0,39020354,39206451,00.htm


It gets even more intresting.

@ainwood: If offered a million CPUs for free wouldn't you take up the offer?


Depends if you only need a million CPUs and you have already agreed to buy them off Intel. Even free stuff would have storage costs applicable to them.

@ainwood: If offered a million CPUs for free wouldn't you take up the offer?It depends. Does it violate any other contractual arrangements that I've entered in to? Are there any caveats on the deal - nothing is ever really 'free'.

It took a lawsuit to even get AMD into the CPU industry, because of Intel's practices.

Think of the world without AMD....

:shudder:

I have my first AMD processor in the computer I just built. I think it is a great product and amazing for overclocking and gaming. I think Intel does have a strong hold over the cpu industry, but I still think a bigger issue is Microsofts grip on the OS and software industry.

I'm still on Intel's side. In a words undertsandable here:

Intel signed a Trade embargo with HP against AMD giving some luxuries for cheaper price.

Why don't they do the same? Start punishing customers? I'd suggest AMD doing the same things they accuse Intel to be doing. Would they succede? No. So they're suing.

I'm still on Intel's side. In a words undertsandable here:

Intel signed a Trade embargo with HP against AMD giving some luxuries for cheaper price.

Why don't they do the same? Start punishing customers? I'd suggest AMD doing the same things they accuse Intel to be doing. Would they succede? No. So they're suing.

Considering that Intel is under investigation or has been found to be guilty of anti trust violation in both the EU and Japan I wouldn't exactly claim this is all AMD.

please. if you guys looked at documents, you would agree that intel is artificially trying to maintain current market share.

Go AMD. It seems that Intel are just like Microsoft.

Hrm, seems a bit like Microsoft, eh? Is Intel doing the whole Monopoly thing?

I am cheering for AMD. Their processor that I bought going on more then 3 years has worked fantastically, nary a problem. I would buy from them again. I definitely think AMD makes better products then Intel.

Think of the world without AMD....
Not necessarily true.. ignorance is bliss. :)

Intel and Micro$oft have some kind of in bed relationship that always been obvioues. Im glad that AMD are a big enough company to stand up to them. Some of the stuff that Intel has got away with in the pass is outrageous i hope it stops soon. Intel i feel wont be around forever, the ydo make good chips but lets face it AMD are better and cheaper. Intel are relying on the name they use to have.

I'm still on Intel's side. In a words undertsandable here:

Intel signed a Trade embargo with HP against AMD giving some luxuries for cheaper price.

Why don't they do the same? Start punishing customers? I'd suggest AMD doing the same things they accuse Intel to be doing. Would they succede? No. So they're suing.

"trade embargoes" as you say are illegal when used to further a monopoly. Were AMD to be in an equal-competitive position with Intel, they would be allowed; but as Intel is the market-dominator by far, Intel isn't likely to be permitted by the courts to do that.

Compare to sodas, for example - both Coke and Pepsi are permitted to engage in this practice, of entering into exclusive contracts, and usually do, because they are fairly equal in the market; not perfectly equal, but on the same level (something like 60-40 iirc).

What makes this discussion more likely to be meaningful, is the percentage of homebuilders who buy AMD cpus compared to Intel. Even taking aside the anti-monopolists who object to Intel on principle, most homebuilders agree that AMDs cpus - especially now that they have the A64 - are superior to Intel's. Intel however massively dominates the prebuilt computer market - with an inferior product? That's probably enough evidence by itself that either Intel is using anticompetitive practices, or that business are just stupid - one or the other, and possibly both ;)

AMD, by the way, is permitted to engage in these practices, as they are not the monopolist / market dominator. They can give away free chips and have exclusive deals all they want...

What may also affect this in some small way, is Intel's new deal to make future Macintosh chips. That was always one argument they could use - that they only make chips for one sort of PC and not the other, thus preventing them from being a true monopoly (even if mac is <10% of the market) ... but no more. :D

I cant speak for all the world here but ive noticed over the last 5 years in England of the swing from Intel to AMD every year it becomes more noticeable. Most pre builds are AMD in England and if you get your parts and do it yourself the suppliers say they basically only stock Intel beacause some people only want Intel theres not much profit in it for them and the sales are poor in comparison.