AMD sues Intel

AMD's lawsuit says that Intel's practices of rebates and subsidies, combined with punishment for PC makers who buy too many AMD chips, has harmed competition and restricted innovation

AMD has filed a lawsuit against Intel in the American courts accusing the chipmaker of forcing major customers to accept exclusive deals and withholding rebates and marketing subsidies to punish those customers who, it says, buy more AMD processors than agreed with Intel.

In the lawsuit, which was filed in the US District Court of Delaware, AMD charges that Intel also threatens retaliation against customers doing business with AMD, has established quotas keeping retailers from selling the computers they want, and forces PC makers to boycott AMD product launches.

In the 48-page filing, which has an exasperated tone, AMD highlights its efforts — most of which it claims were rebuffed — to persuade major original equipment manufacturers to use its processors. For instance, when AMD offered HP, the biggest computer maker in the world, a million processors for free, HP took only 160,000, said AMD.

In an open letter, AMD chief executive Hector Ruiz explained the lawsuit, saying: "Our competitor has harmed and limited competition in the microprocessor industry. On behalf of ourselves, our customers and partners, and consumers worldwide, we have been forced to take action."

For most competitive situations, this is just business, said Ruiz. "But from a monopolist, this is illegal."

Ruiz went on to say that Intel's behaviour 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."

The lawsuit follows a call from Japan's Federal Trade Commission earlier this year for Intel to halt the practice of requiring PC makers to limit the use of competitors' chips in exchange for monetary rebates.

Intel, which accepted the recommendations, noted it disagreed with the agency's findings of fact underlying their allegations and the application of law in the recommendations.