Brussels Throws Another Punch at Intel

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That, of course, is what AMD has been arguing all along. "Intel has paid a leading retailer to turn away AMD-based computers from leading global computer manufacturers, which can only be regarded as robbing consumers of their fundamental right to choose," said Tom McCoy, AMD's executive vice-president, legal affairs, and chief administrative officer, in a statement. "No antitrust laws anywhere in the world permit Intel to pay retailers and computer manufacturers to boycott non-Intel products."

AMD's Chief Executive, Hector Ruiz, has argued repeatedly that Intel's allegedly anticompetitive business practices hurt AMD's bottom line—and he has spent much of his time at the helm of the company seeking redress from the world's regulators. But on July 17, the same day the EC revealed its expanded investigation against Intel, AMD said Ruiz will step down, after the chipmaker reported its seventh straight quarterly loss (BusinessWeek.com, 7/17/08)>. AMD's reins are being passed to Dirk Meyer, the company's chief operating officer. Ruiz will continue in his role of chairman, but it's unclear whether he'll stay long enough to realize his goal of extracting huge damages from Intel.

Litigation Abounds

The path to redress has been tortuous. One early victory came in March, 2005, when Japan's Federal Trade Commission ruled that Intel had violated antitrust laws, based on a complaint from AMD. Intel accepted a consent decree but did not admit any wrongdoing and denied the factual and legal assertions made in the case. In June of the same year, AMD filed a broad antitrust suit in U.S. District Court in Delaware. That case, which has entailed one of the largest discovery processes ever in the history of civil litigation, is not expected to go to trial until 2010.

Even as the private litigation works its way slowly through court, public agencies have been turning up the heat on Intel. In January of this year, AMD enlisted New York State's attorney general to open another front in its long-standing antitrust battle with Intel (BusinessWeek.com, 1/11/08).

Then, in June, Korea's Federal Trade Commission ruled Intel in violation of Korea's antitrust laws, fining the company $25.4 million. The Korean FTC found that Intel had used rebates to persuade Samsung and other South Korean computer makers not to use AMD microprocessors. Intel says it expects to appeal but has not yet received the final written ruling.

The same month the U.S. Federal Trade Commission—which probed Intel in the late 1990s but eventually settled the case without a finding—launched a new formal investigation of Intel and how its conduct affects AMD (BusinessWeek.com, 6/6/08).

Eight Weeks To Respond

As for the European case, Intel says it's confident it will be able to prove the allegations unfounded. Intel maintained in a statement that its conduct "has always been lawful, pro-competitive, and beneficial to consumers." And in a July 18 interview with BusinessWeek, Steven Rodgers, the company's director of litigation, argued that "computer manufacturers have a choice; they can decide what they want to purchase." But, he says, "if Intel is prevented from offering a lower price, that's not competition. That's one competitor being protected from competition."

Intel has eight weeks to respond to the latest allegations and then has the right to request a hearing. Intel CEO Paul Otellini appeared at a Brussels hearing in March to refute charges made in the original complaint, which was filed by AMD in 2005. Intel's arguments apparently did not win over the EC. One "particularly striking" thing about the expanded antitrust case, says Intel's Rodgers, "is that the Commission has not responded to our positions at the March hearing."

Observers say the EC won't likely make a final decision on the case for many months. And with potential appeals in the offing, this battle could rage for ages to come.

Schenker is a BusinessWeek correspondent in Paris.