AMD has filed an antitrust lawsuit against Intel in US District Court for the District of Delaware. They allege in their complaint that "for over a decade, Intel has unlawfully maintained its monopoly by engaging in a relentless, worldwide campaign to coerce customers to refrain from dealing with AMD." They say that in the past several years, Intel's conduct has become "increasingly egregious" as AMD "has achieved technological leadership in critical aspects of the microprocessor architechture."
There will be an audio conference call at noon ET for analysts and the press. It will be available for 10 days thereafter on their website, if you use RealPlayer or Microsoft MediaPlayer. Speaking of monopolies. Here's an Open Letter from Hector Ruiz, AMD Chairman, President and CEO, and you can download the complaint [PDF] from that same page.
The press release says the European Commission "has stated that it is pursuing an investigation
against Intel for similar possible antitrust violations" and is
cooperating with the Japanese authorities, whose Fair Trade Commission
of Japan (JFTC) recently ruled that Intel has "abused its monopoly power to
exclude fair and open competition, violating Section 3 of Japan's
Here's the meat of the press release.
AMD FILES ANTITRUST COMPLAINT AGAINST INTEL IN U.S. FEDERAL DISTRICT
Complaint Details Worldwide Coercion of Computer-Makers,
System-Builders, Distributors and Retailers from Dealing with AMD
Intel's Illegal Acts Inflate Computer Prices and Limit Choices for
Businesses and Consumers -
SUNNYVALE, CA - June 28, 2005 - AMD (NYSE: AMD) announced today that it
filed an antitrust complaint against Intel Corporation ("Intel")
yesterday in U.S. federal district court for the district of Delaware
under Section 2 of the Sherman Antitrust Act, Sections 4 and 16 of the
Clayton Act, and the California Business and Professions Code. The
48-page complaint explains in detail how Intel has unlawfully maintained
its monopoly in the x86 microprocessor market by engaging in worldwide
coercion of customers from dealing with AMD. It identifies 38 companies
that have been victims of coercion by Intel - including large scale
computer-makers, small system-builders, wholesale distributors, and
retailers, through seven types of illegality across three continents.
"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, AMD chairman of the board,
president and chief executive officer. "Whether through higher prices
from monopoly profits, fewer choices in the marketplace or barriers to
innovation - people from Osaka to Frankfurt to Chicago pay the price in
cash every day for Intel's monopoly abuses."
x86 microprocessors run the Microsoft Windows(r), Solaris and Linux
families of operating systems. Even Apple(r), a pioneer of the PC and
one of the industry's enduring innovators, announced that it would
switch exclusively to x86 processors to run Mac OS(r) software beginning
in 2006. Intel's share of this critical market currently counts for
about 80 percent of worldwide sales by unit volume and 90 percent by
revenue, giving it entrenched monopoly ownership and super-dominant
This litigation follows a recent ruling from the Fair Trade Commission
of Japan (JFTC), which found that Intel abused its monopoly power to
exclude fair and open competition, violating Section 3 of Japan's
Antimonopoly Act. These findings reveal that Intel deliberately engaged
in illegal business practices to stop AMD's increasing market share by
imposing limitations on Japanese PC manufacturers. Intel did not
contest these charges.
The European Commission has stated that it is pursuing an investigation
against Intel for similar possible antitrust violations and is
cooperating with the Japanese authorities.
"You don't have to take our word for it when it comes to Intel's abuses;
the Japanese government condemned Intel for its exclusionary and illegal
misconduct," said Thomas M. McCoy, AMD executive vice president, legal
affairs and chief administrative officer. "We encourage regulators
around the world to take a close look at the market failure and consumer
harm Intel's business practices are causing in their nations. Intel
maintains illegal monopoly profits at the expense of consumers and
computer manufacturers, whose margins are razor thin. Now is the time
for consumers and the industry worldwide to break free from the abusive
The 48-page complaint, drafted after an intensive investigation by AMD's
lead outside counsel, Charles P. Diamond of O'Melveny & Myers LLP,
details numerous examples of what Diamond describes as "a pervasive,
global scheme to coerce Intel customers from freely dealing with AMD to
the detriment of customers and consumers worldwide." According to the
complaint, Intel has unlawfully maintained its monopoly by, among other
*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;
*According to industry reports, and as confirmed by the JFTC in Japan,
Intel has paid Dell and Toshiba huge sums not to do business with AMD.
*Intel paid Sony millions for exclusivity. AMD's share of Sony's
business went from 23 percent in '02 to 8% in '03, to 0%, where it
*Forcing other major customers such as NEC, Acer, and Fujitsu into
partial exclusivity agreements by conditioning rebates, allowances and
market development funds (MDF) on customers' agreement to severely limit
or forego entirely purchases from AMD;
*Intel paid NEC several million dollars for caps on NEC's purchases from
AMD. Those caps assured Intel at least 90% of NEC's business in Japan
and imposed a worldwide cap on the amount of AMD business NEC could do.
*Establishing a system of discriminatory and retroactive incentives
triggered by purchases at such high levels as to have the intended
effect of denying customers the freedom to purchase any significant
volume of processors from AMD;
When AMD succeeded in getting on the HP retail roadmap for mobile
computers, and its products sold well, Intel responded by withholding
HP's fourth quarter 2004 rebate check and refusing to waive HP's failure
to achieve its targeted rebate goal; it allowed HP to make up the
shortfall in succeeding quarters by promising Intel at least 90% of HP's
mainstream retail business.
*Threatening retaliation against customers for introducing AMD computer
platforms, particularly in strategic market segments such as commercial
*Then-Compaq CEO Michael Capellas said in 2000 that because of the
volume of business given to AMD, Intel withheld delivery of critical
server chips. Saying "he had a gun to his head," he told AMD he had to
*According to Gateway executives, their company has paid a high price
for even its limited AMD dealings. They claim that Intel has "beaten
them into 'guacamole'" in retaliation.
*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 has been entirely shut out from Media Markt, Europe's largest
computer retailer, which accounts for 35 percent of Germany's retail
*Office Depot declined to stock AMD-powered notebooks regardless of the
amount of financial support AMD offered, citing the risk of retaliation.
*Forcing PC makers and tech partners to boycott AMD product launches or
*Then-Intel CEO Craig Barrett threatened Acer's Chairman with "severe
consequences" for supporting the AMD Athlon 64(tm) launch. This
coincided with an unexplained delay by Intel in providing $15-20M in
market development funds owed to Acer. Acer withdrew from the launch in
*Abusing its market power by forcing on the industry technical standards
and products that have as their main purpose the handicapping of AMD in
*Intel denied AMD access to the highest level of membership for the
Advanced DRAM technology consortium to limit AMD's participation in
critical industry standard decisions that would affect its business.
*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.