AMD insists antitrust is a consumer issue
Published:31-July-2007
By BR staff writer
Advanced Micro Devices has attempted to distance itself from the European Commission's antitrust charges against Intel, insisting that the Commission is acting in the interests of consumers.
"This is not an issue of AMD versus Intel, this is a question that the competition authorities have been presenting to Intel," said Tom McCoy, AMD executive vice president of legal affairs. "The evidence that is supporting the decision from regulators is coming from Intel and the industry. It is not coming from us."
The Competition Commission last week sent Intel its Statement of Objections, outlining how it believes Intel abused its monopoly position at the expense of AMD by providing rebates to OEMs on the condition they got all or most of their CPUs from Intel; paying OEMs to delay or cancel AMD-based product lines; and offering strategic server makers CPUs at below cost.
In response Intel maintained that its actions have benefited consumers and pointed out that EC's findings had not been promoted by consumer complaints. "The case is based on complaints from a direct competitor rather than customers or consumers," said Bruce Sewell, senior vice president and general counsel.
The European Competition Commission expanded its investigation in Intel's business practices last year after a complaint from AMD, which is in the midst of a private antitrust case against Intel in the US.
While AMD could not resist the opportunity to draw attention to the EC's criticism of its processor rival, the company's chairman and CEO, Hector Ruiz, insisted that the concerns of the EC went beyond competition between vendors to whether actions benefited consumers. "Last week's action of The European Commission was not about one company winning or losing," he said.
"This dispute is between the government of the European Union and Intel," added McCoy. "The question is not whether AMD is right, the question is why anyone should believe the European Commission is wrong."
Intel had responded to the Commission's statement by insisting that the microprocessor market is "fiercely competitive" and "functioning normally". McCoy said that the findings of the EC, along with Japanese regulators, suggested otherwise.
In March 2005, the Japanese Fair Trade Commission ruled that Intel's business practices over the previous couple of years had been anti-competitive, prompting Intel to amend its business practices.
McCoy further insisted that if the market is functioning normally it is because of, not despite, the ongoing investigations. "You can tell that the increased global scrutiny on Intel has definitely had an impact in the marketplace, and global OEMs look to take advantage of the spotlight and do more business with us," he said.
Toshiba, one of the companies AMD has alleged Intel coerced into avoiding ADM processors, signed up to buy AMD microprocessors and graphic chipsets to power about one-fifth of the business and consumer laptops it sells in the US and Europe in May.
A year earlier Dell announced that it would begin using AMD processors for its server line, breaking a more than two decade-long practice to use only Intel microprocessors.
Intel could face a fine of up to 10% of its annual global revenues, or $3.5bn based on revenue of $35.4bn in fiscal 2006, and has 10 weeks to respond before the Commission decides whether it has breached antitrust rules.
Asked about the impact of Intel's actions on AMD, McCoy said "the costs to us have been extraordinary in terms of revenue and margin" but insisted that the focus for the EC was the impact on consumers. "We'll worry about the quantification of AMD's losses when we get to trial in Delaware," he said.
"Despite the potential cost of litigation to both parties McCoy stated that there has been no contact between the two in an attempt to avoid court. "Yes, it's very expensive, and no, there are no settlement negotiations in progress," he said.
AMD's private antitrust case against Intel was limited late last year to Intel's actions in the US and is in the discovery phase. It is due to go to trial in April 2009.
