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AMD Files Antitrust Suit Against Intel (UPDATED)

AMD Files Antitrust Suit Against Intel (UPDATED)

by , 3:25 PM EDT, June 28th, 2005

AMD on Tuesday announced that it has filed an antitrust complaint against Intel in U.S. federal district court in Delaware accusing the chip maker of unfair trade practices.

The company cited violations of Section 2 of the Sherman Antitrust Act, Sections 4 and 16 of the Clayton Act and the California Business and Professions Code. AMD said in a statement that its 48-page complaint details "how Intel has unlawfully maintained its monopoly in the x86 microprocessor market by engaging in worldwide coercion of customers from dealing with AMD."

AMD said that Intel's share of the x86 processor market is 80% by unit volume and 90% by revenue, "giving it entrenched monopoly ownership and super-dominant market power." The chip supplier noted that Japan's Fair Trade Commission recently found that Intel abused its monopoly power, something "Intel did not contest," according to AMD, which said that the European Commission is pursuing similar possible violations.

In its press release, AMD cited a long list of violations, including: "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;" and "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."

AMD said that, for example, "Intel paid Sony millions for exclusivity," with its share of Sony's business dropping from 23% in 2002 to 8% in 2003 to zero percent today. The company also detailed aggressive action against Hewlett-Packard, Compaq, Gateway, Acer and other computer manufacturers, action that it said forced them to severely decrease the amount of business they give to AMD. The company also claimed that "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."

Apple will be switching its computers to Intel processors in a year and complete the transition by the end of 2007, but the company was not mentioned, except in passing in AMD's press release.

UPDATE, 5:35 PM EST: After The Mac Observer posted this article, an Intel spokesperson responded to a request for comment by saying: "We strongly disagree with AMD's complaints about the business practices of Intel and Intel's customers. 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. Intel will respond appropriately to AMD's latest complaints and is committed to successfully resolving these issues in court."

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