Intel paid PC makers to shun rival chips, AMD says

Advanced Micro Devices Inc. has expanded the allegations in its antitrust suit against rival Intel, saying the chip giant paid PC makers not to do business with AMD.

In court papers filed May 1 in U.S. District Court in Delaware, AMD claims Intel paid off Acer, Dell, Gateway, major Japanese manufacturers, and system builders and distributors "to close their doors to AMD." Where it couldn't buy exclusivity from PC makers, Intel focused its payments on keeping computers based on AMD microprocessors away from large business customers, AMD said.

Most of the details in the 108-page document, unsealed Monday, have been blacked out, due to a protective order restricting the disclosure of trade secrets and other confidential dealings involving the parties in the suit. AMD sued Intel in June 2005, accusing the chipmaker of illegally using its monopoly to shut AMD out of the market.

The latest filing said Intel paid customers to abandon development of computer models that were essential to the success of a new line of AMD processors. The tactic also was used "to nip in the bud AMD inroads into sectors Intel viewed as critical."

In addition, AMD accused Intel of using discount schemes that made it uneconomical for AMD to compete for a customer's business, and deploying various strong-arm tactics against partners that refused to go along. Those retaliatory tactics included withdrawing marketing funds, withholding critical technical and road map information, allocating scarce products away from disloyal companies, and generally scaling back the level of customer support, the filing said.

In its own brief, Intel denied any anticompetitive practices. The chip giant said that AMD was seeking court protection from discounting and other legal practices within a competitive environment.

"AMD's complaint about Intel's discounting boils down to a complaint that Intel is a more efficient competitor," Intel said.

For a few years before 2006, AMD managed to take market share from Intel, particularly in the market for processors powering server computers. About two years ago, Intel embarked on a reorganization that saw the chipmaker get several important products out before its smaller rival, including a quad-core processor and next-generation 45nm chips that deliver higher power-to-performance ratios.

- Antone Gonsalves
InformationWeek