New York's top lawman slaps Intel with lawsuit
Charged with 'bribery and coercion'
Intel's ongoing legal troubles increased markedly Wednesday morning when New York Attorney General Andrew Cuomo filed a lawsuit alleging that the world's largest microprocessor manufacturer conducted "an illegal campaign to deprive AMD of distribution channels."
The exceptionally detailed 83-page complaint (PDF) alleges that Intel "engaged in a systematic worldwide campaign of illegal, exclusionary conduct to maintain its monopoly power and prices in the market for x86 microprocessors."
In a statement, Cuomo writes that "Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market. Intel's actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices. These illegal tactics must stop and competition must be restored to this vital marketplace."
The suit includes language favorable to Intel's prime competitor, AMD. "Starting in 2001, the threat from competition became salient at Intel," the complaint reads. "Intel’s biggest CPU competitor, Advanced Micro Devices, Inc. ("AMD"), had begun developing x86 chips that not only competed with Intel's offerings, but were in many ways more desirable."
In response to that competition, the suit alleges, Intel began an "illegal campaign" to choke off AMD's distribution channels. In that effort, the suit reads, "Intel paid hundreds of millions – in some cases billions – of dollars in 'rebates' [that] bore no genuine relationship to pro-competitive, volume-based discounts or reasonable efforts to meet specific competitive offers."
In addition, according to the filing, Intel "threatened OEMs with retaliation if they persisted in dealing with AMD." As a result, and in exchange for "billions of dollars in rebate payments and other benefits," the suit notes that Dell, for example, agreed not to sell any AMD products from 2001 to 2006.
Among other charges, the suit alleges that Intel in 2002 reached an agreement with HP (which it subsequently extended to 2004) that "capped HP’s sales of AMD-based business desktop PCs" to a maximum of 5 per cent of that line - which guaranteed that Intel would enjoy the remaining 95 per cent.
Multiple emails cited in the filing indicate that Intel was aware that its actions could be used to implicate it in anti-competitive behavior. One email from "an Intel executive" to Acer, for example, describes an internal Intel electronic record-keeping tool as "a very sensitive and important document which can come under anti-trust scrutiny. Please avoid using strong language like the ones below: a. 'we need kick [sic] them [AMD] out of the major ... companies.' b. ‘maintain the [market segment share] and beat AMD out of the major ... accounts.'"
The lawsuit is just the latest in Intel's legal woes. Having recently been fined €1.06bn ($1.5bn) by the EU for similar - if not identical - anti-competitive practices, the company is reportedly facing a formal complaint by the US Federal Trade Commission in "a matter of weeks or a matter of months," according to sources cited by Reuters.
AMD, as might be guessed, is pleased with Cuomo's action. In a statement provided to The Reg, AMD's EVP of legal, corporate, and public affairs Tom McCoy wrote: "The New York Attorney General's 83-page complaint, filed on behalf of New York State consumers and governmental entities, details explicit evidence of Intel's harm to U.S. consumers and computer manufacturers. Stopping that illegal harm will serve the settled purpose of the American antitrust laws: ensuring that innovation is unconstrained and competition is free to serve consumers."
Intel did not immediately respond to our request for comment. ®
COMMENTS
@ all you commentards
http://www.theregister.co.uk/2009/11/12/intel_amd_settle_suits/
and that's how American companies settle things .. cheap for Intel .. much needed cash boost for AMD .. benefit for consumers ..
even sweeter than the $151 million Microsoft paid to Apple to settle their problems a few years ago right after Jobs took over .. and look where Apple is now !
look for AMD to be doing more than 2.1 % of the world's chip business and actually turn a profit in the near future !
@ Fred 1
"Yes, America, that foul stench is coming from your back yard."
No fuckin' shit Fred .. AMD and Intel are both American companies, as are 10 of the top 25 semiconductor makers .. most of the rest are Japanese or South Korean
Virtually no "foul stench" of chip making nor chip maker lawsuits in UK though, hope your happy about that.
@NBCanuck...
You've almost got a point there, except you're missing one little detail: AMD already has a civil suit against Intel that is well established and under way already, its set to go to trial early next year... so in one respect you're right, the governments involvement only aims to benefit the government financially, and its easy to think that, but if you take in to account AMD's civil suit you would realize how much of a gift this is to AMD.
AMD's suit should be finished first, unless they move to stay it until the governments action is finished, if they go forward now, AMD will get to use all the findings of both new york and the FTC's investigations as part of their claim, as well as the 3 standing international convictions, and, they'll get the first slice of the pie. If the case gets stayed until new york and the FTC are finished then AMD gets 2 more convictions in addition to the EU, south Korea and Japan's to validate their claim. Domestic convictions will be irrefutable in the civil case, even if those convictions come by way of consent decree or settlement.
intel will have no way of wiggling out of this, the only thing the civil jury will have to determine is the amount of damages, each and every government complaint increases those damages... this is a gift to AMD...
And for the record, after getting fucked by intel time and time again, i bought one of the very first Athlons release in 99' and never looked back, i'm not afraid to admit that i'm an AMD fanboy tried and true...
About time
Yes, America, that foul stench is coming from your back yard.
Good to see you have finally noticed.
Bullies and Minnows in a World of Sharks and Sharp Practices/Dodgy Insider Dealings
"As a result, and in exchange for "billions of dollars in rebate payments and other benefits," the suit notes that Dell, for example, agreed not to sell any AMD products from 2001 to 2006." ..... Ergo is Dell a willing and knowledgeable accomplice and active seeding member in the conspiracy, as would also be HP ......"the suit alleges that Intel in 2002 reached an agreement with HP (which it subsequently extended to 2004) that "capped HP’s sales of AMD-based business desktop PCs" to a maximum of 5 per cent of that line - which guaranteed that Intel would enjoy the remaining 95 per cent."
