Intel antitrust case is simpler than Microsoft's, AMD says

Advanced Micro Devices said Friday that the European Commission's antitrust lawsuit against rival chipmaker Intel  is more clear-cut than the regulator's ongoing pursuit of Microsoft.

And although it took longer for the Intel probe to result in formal charges -- seven years, as opposed to three in the Microsoft case -- the Intel case could move ahead much faster, said AMD spokesman, Jens Drews.

"They are two very different cases: one [against Microsoft] involves intellectual property and the other [against Intel] is a straightforward abuse of a dominant position," Drews said.

In formal charges sent to Intel Thursday, the European Commission accused the world's biggest maker of computer chips of handing out "substantial rebates" to computer manufacturers if they buy most of their x86 CPUs (computer processing units) from Intel.

It also accused the company of paying computer makers for scrapping or delaying the launch of machines fitted with AMD chips, and of selling its chips for server computers at below cost to large customers such as governments and universities.

Intel hit back with a statement saying its actions are "lawful, pro-competitive, and beneficial to consumers," and insisted that there is fierce competition in the chip market.

AMD's Drews dismissed Intel's comments. "It's preposterous to claim to be the guardian of consumers. I think they have overplayed their hand there," Drews said.

Intel argues that tough competition has forced down chip prices and that offering price discounts and rebates is normal business practice.

AMD and the Commission believe otherwise: Although below-cost or predatory pricing may be good for consumers in the short term, ultimately it harms them by killing off rivals that would offer more choice and set a faster pace for innovation in the long term, they argue.

Europe's top antitrust regulator wasn't always so sure. In 2002 it effectively closed the Intel investigation after VIA Technologies of Taiwan, which together with AMD had complained about Intel's practices, backed out of the investigation.

The Commission said it didn't have enough evidence to pursue AMD's complaint and the file lay dormant until 2003, when AMD submitted new evidence to the Commission.

"In 2002/'03 it could have gone either way: the case could have been closed or pursued further. In the end it tipped toward pursuing a thorough investigation after we submitted more material," Drews said.

In 2004 the Commission sent out questionnaires to companies in the computer industry, asking them about Intel's behavior in the market. A year later it conducted dawn raids on the offices of Intel as well as many computer manufacturers in the United Kingdom, Germany, Spain and Italy, in pursuit of more evidence against the company.

Last year AMD submitted fresh allegations that Intel had leaned on Europe's biggest consumer electronics retail chain, Media Markt, to discourage the stores from stocking PCs running AMD chips.