Intel and AMD to Duke It Out in Court in April 2009

Published: September 28, 2006

by Timothy Prickett Morgan

In June 2005, chip maker Advanced Micro Devices sued its archrival, Intel, in U.S. Federal District Court in Delaware, alleging that Intel has used its monopoly power in the chip business to illegally maintain that monopoly. The judge hearing the case has ruled on some of the matters in the case and set a trial date of April 2009.

In its original complaint, AMD outlined how 38 OEMs of PCs, laptops, and servers as well as parts distributors have been convinced by threats and the withholding of rebates and other illegal maneuverings to not adopt AMD's chips. AMD's complaint claimed that Intel has a monopoly over the two dominant operating systems on the planet--Windows and Linux--with about 80 percent of processor unit shipments and 90 percent of the revenue, and that it has violated the federal Sherman Antitrust Act and the Clayton Act as well as the California Business and Professions Code. AMD claimed that Intel's pricing, rebating, co-marketing, and co-development deals with major equipment suppliers and parts suppliers forces customers in exclusive or near-exclusive deals with Intel.

The AMD suit was filed last year in the wake of a ruling by the Japanese Fair Trade Commission in early March that found Intel's wholly owned subsidiary in Japan, Intel KK, had violated Japan's Antimonopoly Act by offering rebates, discounts, and other incentives to five major Japanese OEMs in exchange for them selling Intel's processors nearly exclusively. After the Japanese ruling, the European Commission began its own investigation into similar antitrust violations by Intel.

U.S. District Judge Joseph Farnan ruled this week that AMD's claims concerning Intel's business practices outside the United States were not under U.S. law, and so he threw those claims out of court. Those OEM PC and server makers, resellers, and retailers that were allegedly pressured by Intel and are located in the United States are still part of the AMD complaint, however, and these portions of the complaint will proceed to trial.

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