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To: TigerPaw who wrote (175020)	6/29/2005 5:35:30 PM
From: stockman_scott	Read Replies (1) \| Respond to of 176387

An Open Letter from Hector Ruiz, AMD Chairman, President and Chief Executive Officer... amd.com <<...We have filed a 48-page, detailed Complaint in federal district court. Because, as our Complaint explains exhaustively, Intel's actions include: * Forcing major customers to accept exclusive deals, * Withholding rebates and marketing subsidies as a means of punishing customers who buy more than prescribed quantities of processors from AMD, * Threatening retaliation against customers doing business with AMD, * Establishing quotas keeping retailers from selling the computers they want, and * Forcing PC makers to boycott AMD product launches. For most competitive situations, this is just business. But from a monopolist, this is illegal. These serious allegations deserve serious attention. Earned success is one thing. Illegal maintenance of a monopoly is quite another. Intel's behavior is much more than meets the eye. You may not have been aware, but Intel's illegal actions hurt consumers - everyday. Computer buyers pay higher prices inflated by Intel's monopoly profits. Less innovation is produced because less competition exists. Purchasers lose their fundamental right to choose the best technology available. We believe the legal process will work. In the meantime, the men and women of AMD will continue to drive innovation, focusing on our customers and on the people who use computers at home and work every day...>>

To: TigerPaw who wrote (175020)	6/29/2005 5:51:55 PM
From: stockman_scott	Respond to of 176387

AMD and Intel: The long war ahead ______________________________________________________ INFOWORLD TECHWATCH June 29, 2005 weblog.infoworld.com AMD's antitrust lawsuit alleging Intel coerced hardware vendors and retailers into using Intel's chips instead of AMD's with discriminatory pricing, market pressure and intimidation is bound to capture the attention of much of the tech industry for some time to come. Almost 40 companies listed in the complaint received discovery retention notices from AMD, requiring them to keep documents related to this case, Mike Simonoff, an AMD spokesman, told IDG News Service. And so far, AMD has built its case on discussions with industry partners, he said. AMD believes that Intel's practice of providing PC companies with marketing dollars in exchange for purchasing certain amounts of Intel chips excludes AMD from competing on the basis of its technology, AMD executives said in a conference call. AMD will attempt to prove in its antitrust case that this behavior harms consumers and competition. Intel strongly denies any wrong doing. (See an InfoWorld Special Report). The case is expected to start by the end of next year, IDG News Service reported. Some of the documents produced during the Japan Fair Trade Commission's investigation of Intel's business practices revealed that Intel withheld market development funds from Sony, Toshiba, Fujitsu, and other Japanese PC companies unless those companies agreed to drop AMD from their products. Intel disagreed with the JFTC's interpretation of those business practices and did not admit any wrongdoing, but it did not dispute the validity of the charges. In its 48-page complaint, AMD also outlined several instances in which market share leaders like Dell and Hewlett-Packard were pressured to maintain or develop exclusive relationships with Intel, or risk the loss of marketing dollars. Past attempts at pinning anticompetitive behavior on Intel have not succeeded because the world's largest chip maker has been able to compete aggressively without running afoul of antitrust regulations, said Nathan Brookwood, principal analyst with Insight 64 in Saratoga, Calif. "Historically, I've always believed that Intel took its obligations as a dominant supplier in the marketplace very seriously. If the AMD claims have any basis in fact, it's going to shake my perspective on this," Brookwood said. It is no great secret that Intel provides the so-called market development funds -- really just cash payments -- to PC vendors to support marketing activi-ties around new chips or new technologies, said Roger Kay, vice president of client computing at IDC in Framingham, Massachusetts. The specific details of the program are not as well known, but Intel essentially rewards PC companies for including key marketing messages in their advertisements around concepts such as Intel's Centrino mobile technology. The funds can sometimes account for more than half of a company's marketing budget for a specific product, Kay said. AMD will attempt to show that these market development funds are also dependent on maintaining an exclusive relationship with Intel, or fulfilling a quota for a certain amount of Intel chips. This could be trickier than just producing documents and evidence about "suspicious-looking behaviors" on the part of Intel, Kay said. "In a market where there is competition, which supplier is not going to offer some kind of benefit [to its customers] if they are prepared to commit to some kind of exclusivity?" said Brian Gammage, a vice president with Gartner. Posted by Jack McCarthy at June 29, 2005 12:58 PM

To: TigerPaw who wrote (175020)	6/29/2005 6:19:32 PM
From: stockman_scott	Respond to of 176387

Mort Topfer must have signed off on AMD's decision to sue Intel as he has been on the AMD board for almost 5 months now... amd.com A high risk legal battle with the Gorilla in the industry would have been carefully considered by AMD's board. They've made the decision to go ahead and initiate the lawsuit and here are some comments from the official press release... amd.com <<...“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 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 monopoly.” 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 AMD; o 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. o 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; o 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 from AMD; o 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 desktop; o 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. o 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; o AMD has been entirely shut out from Media Markt, Europe’s largest computer retailer, which accounts for 35 percent of Germany’s retail sales. o 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 promotions; o 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 marketplace. o 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. o 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: TigerPaw who wrote (175020)	6/29/2005 8:31:52 PM
From: stockman_scott	Respond to of 176387

The motives behind AMD's suit against Intel ______________________________________________ By John C. Dvorak CBS MarketWatch June 29, 2005 BERKELEY, Calif. (MarketWatch) -- This week AMD filed an antitrust complaint against Intel, whose anti-competitive practices have been the subject of gossip in Silicon Valley for decades. Actually getting these stories told in the form of a 48-page legal complaint is marketing genius. Make no mistake, this is not your father's legal brief. It's written more like a novel or even as a surprisingly well-written PR release. The company admitted that it wanted the brief not to be too filled with legalese and, instead, to be good public reading. As a follow-up it's going to start a marketing campaign with full-page advertising in major market newspapers encouraging the public to download the document and read it. It's available directly from the AMD site here. amd.com It's apparent to me that the goal of this action is to humiliate and embarrass Intel and its Japanese division, Intel Kabushiki Kaisha. If this case ever goes to court and in front of a jury it could possibly become the most entertaining and fun antitrust case ever witnessed by the American public. Stories and tales in the filing include Gateway's Ted Waite telling how Intel allegedly bribed him to dump AMD chips and how his company would become "guacamole" if he didn't comply with Intel (INTC) demands. We are treated to episode after episode of bad and nasty behavior told with amusing flair. All the while AMD (AMD) thematically pounds home the notion that it has once again leap-frogged Intel in basic microprocessor architecture and simply makes a superior product. It rationalizes that because of its clear superiority it's ridiculous, by its way of thinking, that its market share should be stuck at around 9% of the total market. Since many of these anecdotes and accusations are nothing new, you have to wonder why AMD chose now to drop this bomb. The company says it's doing it now because it's making some profit and can afford the process. The timing does coincide nicely, though, with the Apple (AAPL) decision to move to the X86 architecture. This takes the PowerPC chip designs, a competitive product off the table making the X86 even more dominant with Intel apparently getting the X86 business from Apple. According to AMD spokespersons, in a private conference call numerous CEOs and others who have allegedly been strong-armed by Intel have been encouraging AMD to do this lawsuit just so they can be subpoenaed and "forced" to tell their tales of woe. We'll see. Listening to a bunch of industry CEO's moan and groan in court is always entertaining. If AMD can manage to produce even half of the actual offended parties this could become a carnival and contribute greatly to valley lore. And if this does get to court (in the complaint AMD has demanded a jury), it will be most interesting to see how Intel performs on the stand. The company has historically performed poorly while exhibiting an arrogant public demeanor. I suspect Intel is currently head-hunting for image consultants. "Now smile and say, 'we love our customers!' Good, now raise your eyebrows in stunned disbelief." How will this turn out? This should take more than a few years to litigate as the miserable discovery process alone may take one or two years. But these two companies have been locked in legal battles so often and for so many years that this is, in fact, their natural state. So the case shouldn't actually affect anything except to make the already circumspect Intel even more so. If AMD can get enough people to read the complaint, I'm certain it will have accomplished its true goal: to make people think less of Intel and point the finger of shame. That's about it. Oh, except for a counter-suit. Just wait.

To: TigerPaw who wrote (175020)	6/29/2005 8:36:14 PM
From: stockman_scott	Respond to of 176387

Rival sues Intel over corporate 'knee-capping' ______________________________________________________ By David Teather in New York The Guardian (London) - Final Edition June 29, 2005 Advanced Micro Devices has filed a lawsuit against rival chipmaker Intel, accusing it of abusing its dominance of the market by bullying companies into using its products. According to the suit, Intel used high-pressure tactics on at least 38 companies including Dell, Sony, Toshiba, Gateway and Hitachi to force them into signing exclusive deals. The colourfully worded 48-page suit alleged that Intel has "resorted to old-fashioned threats, intimidation and knee-capping" to build its near monopoly in the market for x86 microprocessors, the chips that run operating systems including Microsoft Windows on personal computers. The suit said one computer maker had compared Intel to a cocaine dealer that gets companies hooked on its financial incentives. The suit is the latest salvo in a long-running history of antagonism between the two companies. Intel has a market share of about 80% while AMD has nearly 16%. The complaint details the allegedly aggressive tactics employed by Intel. In one instance, it cites former Compaq Computer chief executive Michael Capellas saying Intel "had a gun to his head" and had withheld products to force him to drop AMD. In another, the suit quotes Gateway executives saying that Intel has "beaten them into guacamole" in retaliation for using some AMD chips. The Gateway chief Ted Waitt allegedly told AMD that Intel had offered him large sums of cash not to deal with AMD. "If by dropping you, I become profitable that is what I do," he allegedly said. Former Intel chief executive Craig Barrett is also alleged to have threatened Taiwanese firm Acer with "severe consequences" if it supported the introduction of the AMD Athlon 64 line of chips. Intel declined to comment as did the personal computer makers referred to in the suit. Charles Diamond, a lawyer representing AMD, said: "We are trying to bust open Intel's choke hold over the computer companies and get the right to compete freely and fairly for every processor they buy." He said AMD is seeking "hundreds of millions of dollars if not billions of dollars" in damages. In March, the Japanese competition authority ruled that Intel had abused its monopoly and warned the company against pressuring clients to buy its chips. Intel denied the underlying charges but said it would remove clauses in contracts that restrict Japanese firms from using other chips. The European commission is also investigating possible antitrust violations by Intel. Hector Ruiz, chief executive of Silicon Valley-based AMD, said: "People from Osaka to Frankfurt to Chicago pay the price in cash every day for Intel's monopoly abuses."