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Update: AMD files broad antitrust suit against Intel

Rival is accused of coercing PC vendors worldwide into using only Intel chips

By John Blau
June 28, 2005 12:00 PM ET

IDG News Service - Advanced Micro Devices Inc. has filed a wide-ranging antitrust suit against Intel Corp., accusing it of maintaining its monopoly in the PC processor market by illegally coercing customers around the world into using its products, AMD announced today.

The suit, filed in the U.S. District Court for the District of Delaware, identifies 38 companies on three continents that were allegedly coerced by Intel, including large-scale computer makers, small system builders, wholesale distributors and retailers, according to a statement from AMD in Sunnyvale, Calif.

The 48-page complaint (download PDF) alleges that Intel used illegal subsidies to win sales and, in some cases, threatened companies with "severe consequences" for using or selling AMD products.

A spokeswoman for Intel in Hong Kong said the company had yet to receive formal notice of the compaint from AMD or the U.S. courts.

"We won't have any comment until we do," said Intel spokeswoman Laura Anderson.

The case pits Intel, the world's largest manufacturer of microprocessors, against its main rival in what could be a long and tough legal fight.

AMD's litigation follows a recent antitrust investigation of Intel by the Japan Fair Trade Commission (JFTC). In March, the JFTC found that Intel had abused its monopoly power to exclude fair and open competition in the Japanese microprocessor market. The result was to substantially restrain competition, the JFTC said.

Intel's Japanese subsidiary agreed in April to refrain from several types of business practices, although it also said it disagreed with the JFTC's findings.

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

AMD's complaint lists several examples of how Intel has allegedly abused its dominant market position. One of them claims that Intel forced major customers, such as Dell Inc., Sony Corp., Gateway Inc. and Hitachi Ltd., into exclusive deals in return for outright cash payments, discriminatory pricing or marketing subsidies.

Intel has also been investigated by U.S. antitrust regulators, although the charges were different in nature. The U.S. Federal Trade Commission filed suit against the chip maker in 1998, accusing it of using its market dominance to coerce trade secrets from some of its customers.

According to the FTC, Intel threatened to withhold information about future chips from three vendors -- Digital Equipment Corp. and Compaq Computer Corp. (which are now part of Hewlett-Packard Co.) and Intergraph Corp. -- unless those companies agreed not to sue Intel over any potential patent violations. The FTC said such strong-arm tactics were against the law when practiced by a company as

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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