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AMD Files Antitrust Lawsuit Against Intel
jonathan_ingram writes "As reported on GrokLaw, AMD has just filed an antitrust lawsuit against Intel. AMD states in its press release that the complaint details "... 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.""
Before this, it was already pretty much a foregone conclusion that Apple would use AMD products where they made sense in the future, and that the Intel announcement, specifically, was intended to be one of simplicity that wouldn't rile up Wall Street and analysts, and we can see that they've succeeded in spades. However, once the transition to the x86 architecture is over, there is nothing stopping Apple from using AMD (and/or x86-64/EM64T from Intel or AMD) where appropriate... ...except, possibly, strongarm tactics by Intel.
Since the transition of high end machines is two and a half years out ("end of 2007"), it's likely that at least some of this will have shaken out by then. So even IF there are any types of exclusivity arrangements with Intel on Apple's part, either explicit or implicit (and please note, there is nothing to suggest there is), Apple, along with many other x86 vendors, will be free to choose the best processor solutions for their products - including those from AMD.
Remember, too, though, that while AMD may have superior products in certain, specific areas, since it shares manufacturing/fabrication capability with IBM, it has run into many of the same manufacturing and supply problems as IBM. Superior products are fine - if you can actually ship them. Intel, while you can cherry-pick instances of supply problems, has proven itself to be a stable and consistent supplier.
All that said, choice and competition is still a good thing for this marketplace.
For more on the transition, see Apple/Intel FAQ.
Didn't Dell complain one time that this was part of the reason they don't sell AMD?
At least while the lawsuit is ongoing, Intel will likely be more careful about its practices, so vendors might offer more AMD systems. I doubt that Dell will jump on board, but it's be nice to see some Thinkpad or Viao A64 based systems.
In the end, Intel will pay a fine and agree to not do anymore what they never admitted to doing in the first place.
Jesus used to be my co-pilot, but we crashed in the mountains and I had to eat him.
and yet, Intel's stock is rising. Who's to say this won't benefit both sides?
Your sig(k) has been stolen. There is a puff of smoke!
Intel has a higher market share than IBM did during the height of the mainframe wars, by almost 20% -- the question isn't whether they have the market share, it's whether they have the power to command the market.
If proven, the allegations in AMD's suit would constitute a slam-dunk finding of market power and abuse of that power.
If you're of the John Carroll "there is no such thing as monopoly" school, none of this matters. On the other hand, most of us prefer a market where there is honest competition on the merits, not one where a competitor is frozen out by under-the-table payments and other dirty tricks.
Lacking <sarcasm> tags,
One good thing about AMD CPUs... I can select AMD and it will be transparent to me as a user. Thus I am free to choose my CPU based on price and other considerations, if I can find one offered.
The Microsoft monopoly is entirely different. Locked in by habit to Windows, most users have a very difficult time switching to Linux. It is also nearly impossible to buy a mainstream computer without Windows. Now that is a monopoly!
All Intel users should be very thankful for AMD. Just think how much Intel chips would cost, if not for AMD. Likewise, Windows users should be very thankful for Linux. Without Linux, Microsoft (which has never innovated in its history) would not even have to play catch-up and improve its product (see IE vs. Firefox).
So, I say go AMD and Linux (I use both) and you should agree even if you use WinTel.
Only three remote holes in the default install, in more than 10 years! OpenBSD
Intel clearly has a monopoly on x86 chips. The FTC got Intel to join a consent decree because Intel had responded to a patent infringement suit by Intergraph by cutting off data and data kits to Intergraph. So Microsoft has been sued, now it's Intel's turn.
A NYC lawyer blogs. http://www.chuangblog.com/
There's a lot of circumstantial evidence pointing to wrongdoing by Intel. But there's a big gap between us all 'knowing' that Intel is engaging in arm-twisting and proving it beyond reasonable doubt in a court of law. Some of the points mentioned in the linked complaint will be very difficult to prove unless AMD has direct, clear evidence.
I think the timing of this complaint is interesting as well. AMD's latest processors have a technical and price-point edge over Intel, hurting a potential Intel argument that customers buy Intel for its "technological superiority". It's profitable, so it has the money to spend on the case. (And trust me, this will take some ca$$$h.) Last, AMD has proven itself to be a viable choice from both a business and technical perspective. This is important for executives called in this case -- they may be a little more willing to testify as witnesses against Intel if they feel they have a "backup plan" (AMD) should Intel try to threaten/punish their business for testifying. (Which is all done very politely and business-like, I'm not talking about TV/Movie style drama with dressed-in-black characters showing up with guns.)
Only three remote holes in the default install, in more than 10 years! OpenBSD
FWIW, my boss, who is a former Intel employee, told me quite frankly several months ago that Intel is guilty of all of this and more. I'm surprised that AMD has waited this long to take action.
I don't get this. Years ago the government put an end to tiered pricing in the auto industry. Why do they allow it in other industries? It's not as if the computer chip industry or the software industries are tint and insignificant compared to the auto industry.
For those who don't know what I'm babbling about, years ago the federal government in the U.S.A. made some laws that auto makers had to sell cars to all the dealerships for the same price. Before this, the auto companies had penalized dealers that sold other brands, and dealers in rural areas that moved smaller quantities of merchandise. What this meant was that any wholesaler(dealer) that wanted to buy a Chevy paid the same amount as anyone else regardless of whether they kissed the manufacturers butt or not.
... Dell uses the AMD argument just to f*ck with intel. I mean seriously. Think about it. Why would they introduce another chip line into low end machines, when their customer base is 90% clueless about computers? They say "oooh, lets look at AMD chips" to get Intel riled up into offering them a deal on the next batch of chips.
Intel? A Monopoly? Not a chance. 80% market share isn't a monopoly. Incentives don't make you a monopolist. You can't compare Intel to DeBeers (who won't put an office in the US cause they know the second they do, their ass is gone). Not even to Microsoft.
-everphilski-
Unfortunately, your wrong.
Unfortunately, his wrong what?
Seriously, though...from TFA:
So, as you can see, these allegations are far from the 'drivel' you make them out to be.
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~ |rip/\/\aster /\/\onkey
I think the claim is not of the "your compiler is specifically optimized for Intel, that's no fair!" variety. It's more of the "your compiler writers went out of their way to generate code that would run slowly on AMD" variety. I bet that's pretty hard to prove, even if it is true... but it's a serious allegation.
It's kind of like the "DOS isn't done until Lotus won't run" allegation, whether that's true or not.
Q4 2001 (same article) - Intel 80.6%, AMD 18.5%
2002 - Intel 86.8%, AMD 11.6%
2003 - Intel 82.6%, AMD 15.8%
2004 - Intel 81.9%, AMD 15.8%
In 2001 Intel dumped their surplus in Japan and gained some market share that way. Another thing driving the figures is the number of chips in the X-Box. Personally I am surprised by these numbers since I do prefer Intel but find the price range and functionality of AMD to be more appealing to my budget.
Two roads diverged in a wood, and I - I took the one the bus load of girls just went down.
In the US, Intel is such a hero to the US govt that DOJ will not make it easy for AMD to hurt Intel. But in Japan, Intel was plain and simple guilty according to many stories such as this and Intel finally admitted as much in their settlement with the Japanese. AMD should bring suit in Japan perhaps?
/. back on March 8 but it wasn't interesting then I guess.
I remembered how that charge against Intel played out because I submitted that story to
You call that a troll? I have a whole beltway full of trolls better than that!
The complaint's history section is an interesting and telling story about how AMD came to enter and, in fact, created the x86 commodity market. I had no knowledge prior to this that IBM's requirement that there be a second supplier of x86 processors was responsible for AMD's birth as a PC processor maker.
And further, I was unaware of Intel's arrangement with AMD and how they screwed AMD over by holding back information and in the case of the 386 (a very significant milestone in processor development) Intel maliciously held back on their agreement to stall AMD from playing in that field.
I recall clearly when AMD was no longer allowed to make Intel pin-compatible processors... that was a disappointment to me in a big way because not only did I have to select a processor, but a motherboard as well! Annoying... and now I know I can blame Intel for that. At first, I thought it was just fair since they wanted to keep AMD from catching up. But now I see it was, more or less, part of Intel breaking their agreement with AMD!! Nice one Intel... I'm not as pound to have Intel inside my Dell laptop now...
From what I recall from the article Intel builds in rebate schemes into their contracts and if a manufacturer meets all the criterier for the rebate and also has a contract with AMD then intel will with hold shipments, up the price of their products and with hold rebates. Basically if you are HP and you know that AMD has the capacity to supply 20% of your chips but not replace Intel atm you can't buy any AMD chips because Intel will with hold their chips leaving you with only 20% of the chips you need. So, it isn't fair business practice or under pricing AMD so much as just pricing slightly higher than AMD then threatening to with hold shipments or kick backs to their clients if they don't use Intel exclusively.
I would disagree, the difference between Microsoft and the AMD case, is who brought the case and did they have a viable alternative? In the former the DOJ brought the case against Microsoft and the DOJ did not offer a viable alternative, after all the DOJ doesn't write operating systems. And to be honest there is no realistic alternative to the average consumer .i.e. grandmother other than Windows. On the other hand in the latter case, AMD is a direct competitor to Intel.
AMD not only offers a viable alternative but in many cases a better alternative. This is not the DOJ bringing suit it's a competitor, AMD, therefore the competitor, AMD, can collect heavy fines and concessions from Intel. It's brilliant and you got to love it right on the heals of the Apple deal, as clearly, AMD's architecture was a better fit for Apples initiatives, or stated initiatives. I.E. performance and power consumption an arena where AMD leads Intel.
Alot of myths are going to be dispelled in this court case and we will find out how Intel has kept it's lead despite inferior products, product instability, and an inability to meet deadlines and demand. The irony is these were all claims Intel made of AMD as to why they, Intel were #1 and a better choice. If I were Intel I'd higher my marketing team to try the case on their behalf.
While I don't doubt that Intel does every trick in the book to keep their profit margins up. I have to wonder exactly how "hurt" AMD is. They are a profitable company and sell a significant number of systems. There are tons of motherboard and system makers supporting them, though not generally the really big ones.
You have to wonder how much of that is because of Intel "strong arming" and how much it is that manufacturers are more comfortable with Intel's product supply capability.
I know if I were shipping a million or more computers a year, I probably wouldn't choose AMD, simply because they have a history of not being able to meet demand.
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MOD PARENT UP. Excellent comment.
Intel began self-destructing several years ago. For example, in my opinion, the Intel consumer products division released lame, unfinished products. Eventually Intel reacted to the poor sales by closing the division.
Like really, really scary horror stories? Here's one more scary than you've ever seen in film. Intel marketing has become detached from reality. Intel marketing people go to work every day, but they just pretend to have meaningful jobs and pretend to be doing something positive for Intel. They are zombies, and most of them don't appear intelligent enough to know that they are zombies. If you think this is an exaggeration, read this sentence from a recent email message from Intel Marketing (I'm talking here about Intel marketing, not Intel's advertising agency.):
"Pass any three of the four tests before July 26, 2005 and your company will get a certificate of completion - plus you'll receive an Intel BunnyPeople Character." Here's an explanation with photo: Intel Bunny People.
Intel has been giving those dolls away for 7 1/2 years. Maybe someone bought a huge number of them?
How many technically-oriented people are motivated by the idea of receiving a doll? It goes like this: 1) Give Intel marketing your company's address and phone number and email address, so that they can spam you in the future. 2) Sit through boring marketing-speak, written by people who don't know or care about Intel products, or any technical product. 3) Take a test. 4) Get a doll?
Intel management appears to have spun out of control. Apparently it is now all stock options and company politics, and nothing about actually doing well. The people in charge don't actually know what they are doing, and apparently care more about having their executive positions than making good products.
Intel is known in Portland, Oregon, where it is based, for being abusive toward its employees. I'm guessing that the present problems really began about 12 or 15 years ago, when the Intel management, just before an enormous increase in profits, pleaded broke and reduced the pay of employees by 10%. Intel is known for over-working its employees, and pressing them to work very long hours.
Once about 2 years ago, I decided to ask Intel marketing people to fix a problem with the motherboard web site. Intel's ordering model number, used when you place an order with a distributor, was nowhere connected on the web site with the marketing model number, like 845BGL. I asked them to fix that. I talked to several marketing employees, all of whom clearly did not intend to do any real work.
I could tell many, many stories about Intel's sink into depression, but that's enough for now. I will have to say, however, that Microsoft's marketing people are worse.
AMD and Intel should be competing over who has the better product, not over who is better able to lock 3rd party vendors into exclusivity.
In terms of product, AMD DOES compete. But Intel isn't giving them the opportunity and is locking them out of dealing with various companies.
There has to be more than one contestant at a beauty pageant. It's not real competition if one of the contestents is preventing the other contestents from participating in the contest.
Does Intel have a strong market power? Sure. Are they using that illegally? Quite possibly.
If that quite possibly turns out to be true, that's all that's required to be found guilty in this lawsuit. If it's against the law, it's AGAINST the LAW. Period. It doesn't matter if you agree with the law, it doesn't matter if your competitor is doing "well enough", it doesn't matter if your competitor is starting to do better than you. There was a law you broke and now you will have to face the consequences.
And I know damn well that Intel engages in this kind of behavior as a matter of doing business. How? I know a hardware supplier in town. He's a friend of mine. One day a few years ago when he was delivering a bunch of parts to me at the office he gave me a 6' x 4' wall banner from AMD, because he knew I bought AMD based systems from him all the time. I thanked him for it, and asked him what the occasion was. He said "I had it up and some of the Intel guys came in and saw it. They got really mad and told me to get rid of it or they wouldn't be so accomodating to us, so I had to take it down!" I asked him what he meant by "accomodating", and he told me they were hinting that maybe he wouldn't be getting his orders as quickly, and there may be problems doing returns with faulty units, etc.
Intel spends a *LOT* of money on the "Intel Inside" and Pentium image. AMD spends very little and is not well known outside techie circles. That "Intel Inside" sticker does mean something to a lot of people, even if they don't know WHAT it means. It's brand recognition.
You don't think that part of their brand recognition advantage over AMD is based on getting rid of all the AMD propaganda from the mom and pop shops like my friend's place, do you?
yeah, i had the link to that, and much more in my submission that got rejected. i guess slashdot decides what to post based on who submits the least information. :) anyway, we have notes from AMD's just released conference call on the antitrust suit here. We also have links to all news stories we have found on the subject here.
We also have links to all AMD pages on their site relating to the case here.
We have followed this story for years, and have recently cited the lack of AMD desktops in Best Buy as recently as 11 days ago, and we will be following this story much more closely and accurately than groklaw.
ignorance is bliss. googlefiberatx.com
Thanks for the thought out reply... the thing is that what about grocery stores? Every square inch of shelf space is critical (as it is in our store), so manufacturers will do whatever it takes to get shelf space in the store. Obviously, a grocery store, even a giant, nasty Wal-Mart one, can't carry everything, so they're going to pick and choose what they offer to sell. Now this may very well be influenced by rebates, etc. Often, it comes with terms such as "carry our entire line, and we'll give you a x% discount". Well, clearly, in order for that to happen, somebody is going to have to get bumped. So in essence, the same thing happens there on a daily basis.
And true, if the consumer wants to buy a Dell, they have to get one with an Intel chip (I'm assuming this is true... I haven't bought a Dell in a loooooong time). But what's to prevent the consumer from going to another vendor? Dell made their choice to stick with Intel only. So a customer who likes AMD chips can't buy at Dell. It's not so much a loss for AMD, as it is for Dell. If AMD is truly that valuable (and I have no idea... I haven't cared about chips until this case, and now I just won't buy AMD on principle), then why won't that consumer just buy an AMd machine elsewhere? Hell, I can go down to Best Buy, Staples, Wal-Mart, my local shop (where I actually do spend my money), etc. to get an AMD-based computer from somebody else.
The consumer certainly has no right to buy a Dell machine with an AMD chip in it any more than I have a right to buy a Ford truck with Toyo Tires. Ford doesn't have any responsibility to offer me a truck with Toyo tires, either.
So then, are you saying that AMD has a right to sell chips to Dell? I contend that they still DO have that right, but of course Dell may not choose to buy from AMD. Now what's the difference between Dell not buying AMD because Intel gives them a massive volume discount, making them cheaper than AMD, and Intel NOT giving them a volume discount because they also sell AMD's? I think it's splitting hairs, and certainly doesn't require any sort of government intervention.
I don't respond to AC's.
AMD get's much of it's FAB technology from IMB, they invented SOI and the first to introduce Copper interconnects. Something AMD licensed from IBM, so, no AMD has no need to steal from Intel on this front. The reason why Intel rushes to change Fab process I.e. the transition from .18 to .13 to .09, etc ... was because they have to, traditionally there CPU's ran hotter and consumed more power. This was due to Intels fondness for deeper pipelines, which allowed for easy scaling of frequency, but increased heat and power consumption. Intel pushed the MHz=power argument, although, it wasn't the case just part of the story so they had to keep shrinking quickly. AMD traditionally used the "smart-cpu" philosophy more efficient processing at the expense of easy frequency scaling. So, AMD had no need to shrink manufacturing process as quickly because they had a better designed CPU.
Prime Example, remember the Athlon was the first to hit 1GHz. Intel said they'd hit 1GHz to, but we never saw a P3 with that frequency until the copermine some 5 months after the announcement, because, Intel needed a die shrink to counteract the heat the P3 would produce and power a P3 1GHz would consume at that frequency.
The die shrinks had to do with neccessity for Intel, AMD could just as easily do the same thing, but they don't need or want to. Hence, they mature their process, why, do you think they moved of the time table for x2 athlon desktop processors by almost 3 months, their shrink to 90mm transistors went very well because they technology matured, no need to rush.
Really, AMD has no choice but to play this now. They provided a bona fide technological coup with their 64 bit extensions, but Intel's market share and AMDs production limitations have kept Intel's predictions accurate -- adoption is slow, mostly just the gamer enthusaists and the server markets are moving 64 bit right now.
But now Intel is threatening to catch up in a serious way with new 64-bit capable processors in full capacity market dump mode. If AMD doesn't firm up its footing, it could lose much of what it has gained.
I'm not a conspiracy theorist (usually), but it wouldn't surprise me if I heard that Microsoft and Intel have quietly agreed to hold off the mass shipping of Longhorn until Intel has staked its claim on the mass 64 bit market. It would strike a serious blow, both morally and at the bottom line, for Intel to remain the de facto chip choice for most of the world at something AMD has innovated and developed and shipped first.
I am sitting in my engineering cubicle, and there are no less than 10 CPUs in my cube engaged in various tasks in various boxen. Three are in-house risc based, one is a C3(!), and the other 6 are all Intel x86 32-bit. AMD is trying to establish itself as a viable corporate desktop / workstation contendor before Longhorn leads the corporate world through their next hardware / OS upgrade cycle, and now is the time to make that move, as I can guarantee that 5 years from now, there will still be 10+ cpus in this cube, the question is, whose?
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