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Intel Replies to AMD Antitrust Lawsuits

pr1000 writes "The New York Times is reporting today that Intel has replied sharply to AMD's lawsuit. This lawsuit sounds like it will be a bruiser." From the article: "The claims are factually incorrect and contradictory...The evidence will show that every failure and setback for which A.M.D. today seeks to blame Intel is actually a direct result of A.M.D.'s own actions or inactions."

22 of 170 comments (clear)

  1. Your PC is too cheap... by penguinoid · · Score: 3, Insightful

    Intel's formal response came nine weeks after A.M.D. accused Intel of unfair pricing and rebates, and of coercing customers to prevent them from using A.M.D. microprocessors.

    While I rather like AMD, I really can't argue against lower prices. Um, yay intel?

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    1. Re:Your PC is too cheap... by axialtilt · · Score: 1, Insightful

      you think they'll stay cheap once Intel force AMD out of business...? you think that's air you're breathing....?

    2. Re:Your PC is too cheap... by Dachannien · · Score: 4, Insightful

      I'd rather have access to lower prices that arise from market forces rather than coercion. AMD asserts that Intel only gave the lower prices to companies that agreed not to install AMD chips in their machines.

      With fair competition, prices would remain just as low, and people would be able to choose between an AMD processor or an Intel processor in their crappy new Dell. Lower prices + choice > lower prices.

  2. Reverting to the Microsoft defence... by MosesJones · · Score: 4, Insightful


    MS/Intel: "We did nothing at all to try and impact our competition or operate in anyway unfairly"

    Netscape/AMD: "So what about this memo where you say you are going to do everything to 'kill' us"

    MS/Intel: "You made us do it, its your own fault"

    Its going to be brusing but the key is going to be disclosure.

    --
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  3. What would you expect? by Slime-dogg · · Score: 3, Insightful

    Would you really expect Intel to say "Oh, we're sorry that we're monopolists. Please punish us!"

    Who knows. Maybe Intel is right, maybe not. Court will decide.

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    1. Re:What would you expect? by ifwm · · Score: 2, Insightful

      "Practically speaking it's always a crime because common business practices are illegal if you're a monopoly"

      What the hell are you talking about. A mom and pop shop that's the only one in town has a monopoly, but there's nothing illegal about them doing business.

    2. Re:What would you expect? by supabeast! · · Score: 2, Insightful

      "Much as I like intel's low prices, that won't last if they become a monopoly."

      And that's the huge flaw in AMD's case. Intel isn't manipulating prices because it has a monopoly, but does so because it wants to maintain market share in the face of competitors like AMD, VIA, and formerly Transmeta. With Chinese x86 CPUs bound to appear within the next few years, intel has to keep doing stuff like this to compete. What intel is doing isn't a monopolist abusing its status, it's a market leader fighting to hold on to the top spot.

  4. Re:A bruiser? by Infonaut · · Score: 5, Insightful
    More like a playground argument.

    Perhaps, but it's a playground argument with big ramifications for both companies (for AMD in particular). They've been at it in the courts for years, but not without some consequences. As the article notes, a settlement in 1995 gave AMD the right to develop chips based on the Intel x86 design.

    What I find interesting is Balto's claim that Intel is taking this suit very seriously and that it could take three or four years to litigate. That's got to be a big distraction in money and effort for both companies.

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  5. Blah blah blah by SpazAttak · · Score: 5, Insightful

    Intel is right to an extent. AMD has always had trouble with production and all that. But that doesn't really address AMD's assertion of Intel's anti-competative practices in the least. They seem to be hoping everyone will be too busy saying 'oooooh snap' to realize that its all a bunch of double-talk.

    1. Re:Blah blah blah by Red+Flayer · · Score: 4, Insightful

      Intel is also trying to limit their liability by disproving any claims for damages.

      But, if AMD was not competitive due to internal problems, why would Intel need to bother strong-arming their clients?

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  6. Anti-Trust by LegendOfLink · · Score: 2, Insightful

    I don't know if I actually believe anti-trust laws are a good thing. I mean, let's take a look at the market, Intel had the crown in the beginning for a long time; then AMD put out something better (Athlon) and for a while, people were flocking towards AMD (be it for the cheaper prices or the underdog appeal).

    During those times when the cut-throat competition between Intel and AMD brought about great changes on processor speed and performance (remember how fast we went from 266Mhz to 1Ghz?) it seemed there wasn't any need for lawsuits.

    Now innovation is getting pretty stale and all of a sudden, we're seeing the lawsuits. Don't get me wrong, I use AMD for all my rigs; but is there really a need for the anti-trust laws today? The next company to build the better processor will get their advantage, instead of just watching who will win the next lawsuit.

    1. Re:Anti-Trust by strcmp · · Score: 1, Insightful
      Antitrust laws certainly are necessary. In the corporate world, money and power tend to concentrate (corporations buy others, merge, etc...), so monopolies are the natural result. Unrestricted monopolies can manipulate their prices however they please. Antitrust laws are in place partly to prevent the formation of monopolies.

      For example, antitrust laws prohbit a practice known as predatory pricing, in which a corporation sets prices below the profit margin temporarily. Once a corporation becomes large enough, it can eliminate any competition by predatory pricing because a smaller company will not have the resources be able to match such low prices. For this reason, predatory pricing is prohibited by antitrust laws.

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    2. Re:Anti-Trust by jim_v2000 · · Score: 5, Insightful

      I use AMD for all my rigs; but is there really a need for the anti-trust laws today? The next company to build the better processor will get their advantage, instead of just watching who will win the next lawsuit.

      You're looking at this from an I-Build-My-Own-Computer perspective. AMD doesn't care about selling to you. You're pocket change. AMD wants to sell to Dell, Compaq, HP, Gateway....the commercial market. And right now AMD is claiming that because of financial blackmail, Intel is keeping AMD from being able to compete in that market.

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  7. Fab 36 by Anonymous Coward · · Score: 1, Insightful

    The most interesting part is the timing of the lawsuit. It will be all over the media by the time AMD gets Fab 36 to full capacity, and then not even Dell can argue that AMD cannot supply enough volume. I am curious to see what's the next excuse Dell will use.

  8. The reason for the lawsuit by vojtech · · Score: 4, Insightful
    It's just pure speculation, but I guess the real reason for the antitrust lawsuit by AMD is the Turion® mobile CPU.

    AMD can't sell the Turions in the white-box market, where most of its CPUs are being sold, and must rely on bigger players in the PC industry, like Dell or HP to include it in their notebooks.

    After all, who builds his notebook himself at home?

    Now just the fact of the existence of the lawsuit will force Intel to tone down on their rebate practices, and this may open a window for AMD to sell the chips in quantities larger than the bare usually allowed by Intel's rebate system.

    Good luck, AMD!

  9. Surely thats no defense. by malsdavis · · Score: 2, Insightful
    "The evidence will show that every failure and setback for which A.M.D. today seeks to blame Intel is actually a direct result of A.M.D.'s own actions or inactions."

    So basically their saying that AMD also had the oppurtunity to act as deceitfully as Intel do, but because they didn't it's their own fault?
    Sounds like an admission of guilt to me.

  10. None of this is "all of a sudden" by fireboy1919 · · Score: 2, Insightful

    Your history is a little off. People didn't just "flock" to AMD. AMD fought tooth-and-nail with prices nearly half those of Intels starting around the same time Intel release the Pentium.

    Athlons came much, much later.

    Maybe they're starting to get frustrated that they don't have more marketshare than Intel already?
    They're usually cheaper, and they usually outperform.

    It can take a while for an engineering company to realize that their competition is being underhanded. Today, it's certainly late enough in the game for them to realize this. "All of a sudden" has actually been a long time coming.

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  11. Too much Kool-Aid around here! by goldspider · · Score: 3, Insightful

    0mg wtf? Intel is t3h sux0r!

    Seriously people, a lot of you need to start looking at things more objectively. Maybe Intel illegally leverages its market power. Maybe poor planning and management have hindered AMD's growth.

    But to dismiss either side purely on ideology doesn't speak highly of your ability (or willingness) to comprehensively consider issues like this.

    Let's wait for the facts to come out, and then we can start making our judgements.

    --
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    1. Re:Too much Kool-Aid around here! by KagatoLNX · · Score: 4, Insightful

      I've always pitied AMD because they seem to have a better engineered product (certain K6s and K6-2s excepted) but never seem to get anywhere because the right people don't adopt their product. Until fairly recently, I couldn't get a SuperMicro server with an AMD in it. Even now you can supposedly get an Opteron, but can't fit it in all of their rackmount options and they don't even list it on their web site!

      It's the deals like this that make it really tough for AMD. Admittedly, as a customer, I can't find a vendor that satisfies my need for an inexpensive, reliable, AMD-based server. Looking a their pricing, this isn't AMDs fault and I don't really believe it's a technical issue either.

      Similarly you'll note the dearth of 4+ processor AMD systems. This is important. Their MP model makes it easy to scale this high and it shows in the custom market (many 32/64 proc Opteron options if you're buying a custom-built supercomputer). However, the low end ones are not being built and its only because Intel puts a lot of pressure on its technology partners to insure that they can't afford to build a sub-$800 8-processor Opteron board. Either you lose your processor pricing or you'll get exciting new "patent-licensing" deals.

      WRT to the market forces involved, the assumption is that, barring bad management, a good product at the right price should prevail. While Intel can complain about AMD's management, I think the problem is that they never have the money to operate correctly because of Intel's influence. The effective choice is that your management can hinder the company to match the amount of business the monopolist lets you have or it can operate with an aggressive but realistic business plan that falls on its face because of illegal practices. In short, Intel says, "your management should have planned for the material damages from our illegal activities" and AMD should very much answer "damages are damages, it may not have been really good business to not account well for them, but that doesn't dimish your responsibility for the damage".

      And as for "waiting for the facts to come out", this is a court room. I'm sure any facts involved will be mangled beyond all recognition once they finally "come out".

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  12. AMD Admits capacity restriaint - NOT suffering by Anonymous Coward · · Score: 2, Insightful

    Everyone here should note that AMD admits that they are "capacity restrained", meaning they sell EVERY SINGLE PIECE of product they manufacture, and at the end of the day they don't even have enough capacity to satisfy all their orders.

    SO, how can AMD argue that they are under the thumb of a vicious monopoly when they themselves are responsible for their own lacking ability to truley attack the marketplace? Is Intel to blaim for their unwillingness to invest in adequate production to meet the demands of a growing market?

    Someone correct me if I'm wrong on this point, but AMD really does appear to be the whining baby, while Intel appears to actually care about their business models, production capcity and business ethics.

    1. Re:AMD Admits capacity restriaint - NOT suffering by Anonymous Coward · · Score: 1, Insightful

      You can't build capacity if you don't have a market.

      If you are shut out of a large section of a market (say OEMs), you may be off building less, rather than having chips you can't sell.

  13. Re:AMD doesn't do business with by japhmi · · Score: 2, Insightful
    A.M.D.'s suit also alleges that Intel used illegal tactics to persuade dozens of companies - including Dell, Sony and Toshiba - not to use A.M.D. chips. In its response on Thursday, Intel called A.M.D.'s claims contradictory, since A.M.D. currently does business with many of those same companies.

    Doesn't do business with many of those same companies, eh? I though that was one of the major points of the lawsuit

    Go back and read again, especially the part where it says "AMD currently DOES buisiness..."

    I believe the best defense is in the response, where Intel says that they've gained market share in the server buisness because of the Opteron. From the response:

    "After dedicating a significant portion of its capacity to producing its recent Opteron processors, AMD has seen gains in its share of microprocessor sales in the profitable server market segment. This is precisely what one would expect in a truly competitive industry. In part because if this increased penetration of the server segment, AMD has been able to increase its average selling prices and profits from the sale of microprocessors."


    I.E. When AMD does something right, they do better.
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