AMD files broad antitrust suit against Intel

Advanced Micro Devices (AMD) has filed a wide-ranging antitrust suit against Intel, accusing it of maintaining its monopoly in the PC processor market by illegally coercing customers around the world into using its products, AMD said Tuesday.

The suit, filed in 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, California.

The 48-page complaint 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 from AMD or the U.S. courts about a complaint.

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

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

AMD's litigation follows a recent antitrust investigation of Intel by the Fair Trade Commission of Japan (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 it is pursuing an investigation against Intel for possible antitrust violations and that it was cooperating with the Japanese authorities.

Intel has also been investigated by U.S. antitrust regulators, although the charges were different in nature. The U.S. Federal Trade Commission (FTC) 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 (which are now part of Hewlett-Packard) and Intergraph  -- 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 dominant as Intel.

Intel eventually settled the case in March 1999. It agreed to refrain from certain practices but denied any wrongdoing.

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

Another complaint involves the European joint venture Fujitsu Siemens Computers, which was once a mainstay for AMD's desktop business, with AMD chips powering over 30 percent of Fujitsu Siemens' consumer PCs, according to the complaint. In early 2003, Intel offered Fujitsu Siemens a "special discount" on its Celeron processors. Fujitsu Siemens accepted the offer in exchange for hiding its AMD computers on its Web site and removing references to AMD-powered products from its retail catalog, according to AMD.