AMD announced today that it filed an antitrust complaint against Intel Corporation (“Intel”) yesterday in U.S. federal district court for the district of Delaware under Section 2 of the Sherman Antitrust Act, Sections 4 and 16 of the Clayton Act, and the California Business and Professions Code. The 48-page complaint explains in detail 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.
AMD (NYSE: AMD) announced today that it filed an antitrust complaint against
Intel Corporation (“Intel”) yesterday in U.S. federal district court for the
district of Delaware under Section 2 of the Sherman Antitrust Act, Sections 4
and 16 of the Clayton Act, and the California Business and Professions Code. The
48-page complaint explains in detail 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.
“Everywhere in the world, customers deserve freedom of choice and the
benefits of innovation – and these are being stolen away in the microprocessor
market,” said Hector Ruiz, AMD chairman of the board, president and chief
executive officer. “Whether through higher prices from monopoly profits, fewer
choices in the marketplace or barriers to innovation – people from Osaka to
Frankfurt to Chicago pay the price in cash every day for Intel’s monopoly
x86 microprocessors run the Microsoft Windows®, Solaris and Linux families of
operating systems. Even Apple®, a pioneer of the PC and one of the industry’s
enduring innovators, announced that it would switch exclusively to x86
processors to run Mac OS® software beginning in 2006. Intel’s share of this
critical market currently counts for about 80 percent of worldwide sales by unit
volume and 90 percent by revenue, giving it entrenched monopoly ownership and
super-dominant market power.
This litigation follows a recent ruling from the Fair Trade Commission of
Japan (JFTC), which found that Intel abused its monopoly power to exclude fair
and open competition, violating Section 3 of Japan’s Antimonopoly Act. These
findings reveal that Intel deliberately engaged in illegal business practices to
stop AMD’s increasing market share by imposing limitations on Japanese PC
manufacturers. Intel did not contest these charges.
The European Commission has stated that it is pursuing an investigation
against Intel for similar possible antitrust violations and is cooperating with
the Japanese authorities.
“You don’t have to take our word for it when it comes to Intel’s abuses; the
Japanese government condemned Intel for its exclusionary and illegal
misconduct,” said Thomas M. McCoy, AMD executive vice president, legal affairs
and chief administrative -more- #2 25118
officer. “We encourage regulators around the world to take a close look at the
market failure and consumer harm Intel’s business practices are causing in their
nations. Intel maintains illegal monopoly profits at the expense of consumers
and computer manufacturers, whose margins are razor thin. Now is the time for
consumers and the industry worldwide to break free from the abusive Intel
The 48-page complaint, drafted after an intensive investigation by AMD’s lead
outside counsel, Charles P. Diamond of O’Melveny & Myers LLP, details numerous
examples of what Diamond describes as “a pervasive, global scheme to coerce
Intel customers from freely dealing with AMD to the detriment of customers and
consumers worldwide.” According to the complaint, Intel has unlawfully
maintained its monopoly by, among other things:
- Forcing major customers such as Dell, Sony, Toshiba, Gateway, and Hitachi
into Intel-exclusive deals in return for outright cash payments,
discriminatory pricing or marketing subsidies conditioned on the exclusion of
- According to industry reports, and as confirmed by the JFTC in Japan,
Intel has paid Dell and Toshiba huge sums not to do business with AMD.
- Intel paid Sony millions for exclusivity. AMD’s share of Sony’s business
went from 23 percent in ‘02 to 8% in ‘03, to 0%, where it remains today.
- Forcing other major customers such as NEC, Acer, and Fujitsu into partial
exclusivity agreements by conditioning rebates, allowances and market
development funds (MDF) on customers’ agreement to severely limit or forego
entirely purchases from AMD;
- Intel paid NEC several million dollars for caps on NEC’s purchases from
AMD. Those caps assured Intel at least 90% of NEC’s business in Japan and
imposed a worldwide cap on the amount of AMD business NEC could do.
- Establishing a system of discriminatory and retroactive incentives
triggered by purchases at such high levels as to have the intended effect of
denying customers the freedom to purchase any significant volume of processors
- When AMD succeeded in getting on the HP retail roadmap for mobile
computers, and its products sold well, Intel responded by withholding HP’s
fourth quarter 2004 rebate check and refusing to waive HP’s failure to achieve
its targeted rebate goal; it allowed HP to make up the shortfall in succeeding
quarters by promising Intel at least 90% of HP’s mainstream retail business.
- Threatening retaliation against customers for introducing AMD computer
platforms, particularly in strategic market segments such as commercial
- Then-Compaq CEO Michael Capellas said in 2000 that because of the volume
of business given to AMD, Intel withheld delivery of critical server chips.
Saying “he had a gun to his head,” he told AMD he had to stop buying.
- According to Gateway executives, their company has paid a high price for
even its limited AMD dealings. They claim that Intel has “beaten them into
‘guacamole’” in retaliation.
- Establishing and enforcing quotas among key retailers such as Best Buy and
Circuit City, effectively requiring them to stock overwhelmingly or
exclusively, Intel computers, artificially limiting consumer choice;
- AMD has been entirely shut out from Media Markt, Europe’s largest computer
retailer, which accounts for 35 percent of Germany’s retail sales.
- Office Depot declined to stock AMD-powered notebooks regardless of the
amount of financial support AMD offered, citing the risk of retaliation.
- Forcing PC makers and tech partners to boycott AMD product launches or
- Then-Intel CEO Craig Barrett threatened Acer’s Chairman with “severe
consequences” for supporting the AMD Athlon 64™ launch. This coincided with an
unexplained delay by Intel in providing $ 15-20M in market development funds
owed to Acer. Acer withdrew from the launch in September 2003.
- Abusing its market power by forcing on the industry technical standards
and products that have as their main purpose the handicapping of AMD in the
- Intel denied AMD access to the highest level of membership for the
Advanced DRAM technology consortium to limit AMD’s participation in critical
industry standard decisions that would affect its business.
- Intel designed its compilers, which translate software programs into
machine-readable language, to degrade a program’s performance if operated on a
computer powered by an AMD microprocessor.
To view the full text of the complaint, please visit
Leading publications such as The Wall Street Journal, The Washington Post,
The Economist, San Jose Mercury News and CNET have recognized AMD as a leader in
microprocessor innovation. AMD has achieved technological leadership in critical
aspects of the x86 market, particularly with its AMD Opteron™ microprocessor,
the first microprocessor to take x86 computing from 32 to 64 bits, and with its
dual-core processors. The company has also stated its commitment to help deliver
basic computing and Internet connectivity to 50 percent of the world’s
population by the year 2015.
Press and Analyst Conference Call
Hector Ruiz, AMD chairman, president and CEO; Thomas M. McCoy, AMD executive
vice president, legal affairs and chief administrative officer; and Charles P.
Diamond, partner at O’Melveny & Myers, LLP and AMD’s lead outside counsel will
discuss the details of the antitrust complaint against Intel at 9:15 AM PDT
today on an audio conference call. Following their remarks, there will be a
question and answer session.
Dial-in number: (651) 291-0618
(800) 475-6701 in North America
(320) 365-3844 outside the U.S.
The audio conference will be available live and for 10 days after the conference
AMD’s Position on Fair and Open Competition
AMD stands for fair and open competition and the value and variety competition
delivers to the marketplace. Innovative AMD technology allows users to break
free to reach new levels of performance, productivity and creativity. Businesses
and consumers should have the freedom to choose from a range of competitive
products that come from continuous innovation. When market forces work,
consumers have choice and everyone wins. For more information, please visit