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Chipmaker Intel is asking the federal judge overseeing the antitrust case brought by AMD to set aside certain elements of the case

AMD's antitrust case against Intel has been rather big news for the past ten months. AMD originally filed a 48-page briefing describing all Intel's past transgressions and how the company's actions impeded its business operations. This includes forcing major system-makers to enter into Intel-exclusive deals in return for cash payments, using discriminatory incentives to push deter the use of AMD processors, forcing the boycott of AMD products and threatening companies for using AMD processors.

Intel has filed a motion to dismiss certain elements related the antitrust case citing jurisdictional issues. Intel claims that the federal courts don’t have jurisdiction because some of AMD’s complaints are about overseas sales rather than domestic. AMD responded by claiming that Intel is simply trying to dodge the issue. From CNET:

"Before subjecting Intel to the burden of defending its foreign business practices in a U.S. Court, AMD must meet the burden of establishing that this court has subject matter jurisdiction over AMD's foreign commerce claims," Intel's brief states.


Update 05/04/2006: AMD executive vice president, legal affairs, and chief administrative officer Tom McCoy has released this statement in regards to Intel's wish to have elements of the case dropped:

Intel's motion to dismiss is just another Intel effort to escape responsibility for illegal marketplace conduct and to inhibit fair and open competition in the microprocessor market. The lawsuit deals with exclusionary conduct perpetrated by one U.S.-based company against another U.S.-based company. Moreover, such exclusionary conduct, regardless of where it occurs, harms consumers worldwide, beginning with those in the United States, by raising prices and stifling innovation everywhere. Intel's global exclusionary practices fall easily within the purview of U.S. antitrust laws and we expect that Intel's motion will be denied.

Intel's motion ignores one incontrovertible truth: the microprocessor marketplace is global and is dominated by a single monopoly firm. When Intel excludes AMD from selling to computer manufacturers in the global marketplace, Intel has directly harmed AMD's ability to innovate new products that can be sold to OEMs in the United States. It also hinders AMD's ability to take on Intel's economic coercion of U.S. OEMs and others in the channel. As a result of Intel's exclusionary conduct, PC makers, who sell their products to consumers all over the world, are forced to pay higher prices for microprocessors than they would in a competitive environment and they deliver less innovation and choice in return.

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Eh not as simple as you might think
By Master Kenobi (blog) on 5/4/2006 11:00:08 AM , Rating: 2
While this does get Intel off the hook, it hardly matters. Court or not its unlikely that Intel will end up under the same gun Microsoft found itself under a few years back.

Overseas is clearly a different matter, and if you honestly think Intel's army of lawyers aren't going to do what every other companies lawyers do, your wrong. They found a gaping whole in AMD's argument, and they are going to run a train through it. AMD will need to send legal teams and file suits in the various countries abroad to get Intel into any hot water.

Now as for Domestically, AMD's case is weak at best, sure they have a valid argument, but its not strong enough for the courts to give any crippling judgements against Intel. Intel is much like Microsoft, they are well aware of what they do, and they will skate the legal edge when they want or need to. They have the armies of skilled lawyers to keep any court tied up for decades, and the US Gov't has better things to do than deal with someone Crying Monopoly when the person crying clearly has a good chunk of the market share.

This is mainly for AMD to establish a precedence case for future suits by AMD or other manufacturers against Intel, as well as putting Intel under some public scrutiny.

End Result. Eh not much. Judges throw out case, or rule its inconclusive, worst case, Intel ties up the courts until they just settle for some pocket amount of money. Either way AMD gets what it wanted, publicity for Intel under the spotlight as a big bad monopoly, and sets a legal precedence to allow more suits to follow from any number of industry players (See Blackberry's recent settlement and new suit)




RE: Eh not as simple as you might think
By patentman on 5/4/2006 11:20:37 AM , Rating: 2
Unless you've got all the evidence of the case, I think your predictions are highly questionable. And antitrust cases are rarely if ever thrown out because they are "inconclusive." There may be insufficient evidence to show a cause of action or to establish one of the myriad antitrust violations, but I have never heard a lack of evidence referred to by a court as being "inconclusive."


RE: Eh not as simple as you might think
By Master Kenobi (blog) on 5/4/2006 1:46:28 PM , Rating: 2
Might be bad wording on my part, I meant that they need to prove beyond a shadow of a doubt that Intel is being monopolistic, and have plenty of supporting evidence, DOJ won't make a decision with big players like Intel or Microsoft, without a mountain of evidence and data to support the claim, otherwise the high priced Intel legal team will eat it for breakfast.


By Phynaz on 5/4/2006 4:29:29 PM , Rating: 1
Incorrect.

This is a civil case, which only requires a preponderance of evidence, not evidence beyond a shadow of doubt.


RE: Eh not as simple as you might think
By Dfere on 5/4/2006 4:33:21 PM , Rating: 2
Shadow of a doubt is a song. Not a legal term. Reasonable doubt is....... a criminal term. This is ant-trust law.


By patentman on 5/4/2006 5:02:02 PM , Rating: 2
Their are both criminal and civil penalties available for antitrust violations.


RE: Eh not as simple as you might think
By Viditor on 5/4/2006 11:34:55 AM , Rating: 2
Patentman is quite correct when he says
quote:
whether the U.S. will have juriusdiction over overseas sales depends on whether the anticompetitive actions at issue had a foreseeable impact on the U.S. economy

I can't imagine this motion being granted...

1. Overseas sales have a HUGE effect on the US economy (just ask the US delegation in China right now...)

2. Unfair trade practices against a US company overseas can directly effect US consumers by lowering the ability of a company to compete locally as well as internationally.

3. The judge is being asked to throw out half of a case he has no facts on


RE: Eh not as simple as you might think
By Phynaz on 5/4/2006 11:50:27 AM , Rating: 1
Facts will not matter.

The question is, does a U.S. court have jurisdiction over events that occured in Taiwan? Logic would dictate they don't.


By mxzrider2 on 5/4/2006 12:03:01 PM , Rating: 2
did u even read the rest of his post, and yes the facts do matter,
FACT: Intel gave larger dicounts to dell for using only intel systems. dell is the largest computer manufacturer in the WORLD, doing this moves AMD systems out of markets, this is a fact that matters.


RE: Eh not as simple as you might think
By Viditor on 5/4/2006 12:04:59 PM , Rating: 2
quote:
The question is, does a U.S. court have jurisdiction over events that occured in Taiwan?

Yes, if they involve a US company and effect events in the US.
For example, if a US company had a total monopoly on a product that was manufactured outside the US and engaged in price fixing so that all customers were forced to pay what they asked, that would be a violation of the anti-trust laws even though it was all done outside the US. The DOJ would be allowed to seize any and all US assets if they were found guilty...


RE: Eh not as simple as you might think
By Master Kenobi (blog) on 5/4/2006 1:44:10 PM , Rating: 2
True, but you need to understand that when it gets international, it gets political. The DOJ will have to walk a very fine rope in regard to evidence, and charges. It may be true that Intel has a monopoly outside the USA, and uses that to its advantage, but you also need to understand, US laws don't apply in the international market place. A shining example of this would be Yahoo and Google right now in China. Is that admissable in the USA? No freaking way. But if you want to do business elsewhere in the world, you WILL adhere to the rules and regulations of the places you are doing business. As long as Intel hasn't broken any laws in the individual countries, then there is nothing the DOJ can do, its outside their jurisdiction, and if they try to reach out of their jurisdiction, the political crapstorm will put the DOJ under Washington's boot to knock it off and let it go.

They need to keep it inside the US as much as possible to make and win a case against Intel, reaching out of the country US business or not, will get your hand slapped by international politics.

I'm just not seeing any real way for AMD to push this case without it crossing into a political grey area and the DOJ knows better than to venture into it. Guess were gonna see how well AMD can field a legal team.


RE: Eh not as simple as you might think
By Phynaz on 5/4/2006 2:40:14 PM , Rating: 1
The DOJ is not involved.

This is a civil suit, not a criminal suit.


By patentman on 5/4/2006 3:39:49 PM , Rating: 2
Good lord no one in hear knows anythign about antitrust law.

1. The antitrust division of the FTC prosecutes antitrust cases; not the DOJ; including BOTH civil and criminal antitrust actions. In addition to the FTC, private companies can seek enforcement of the antitrust laws (like AMD is doing in this case). Further, in some instances, the government can sue on behalf of a company in what is acalled a parens patriae suit.

2. The antitrust division of the FTC is specifically set up to take on monster companies like intel and their high priced lawyers. Moreover, they do not need a mountain of evidence to bring a case, especially at the pleadings/summary judgement stage. Discovery is where all the evidence comes out, and that takes LOOOOOOONG time, hence why antitrust cases are, on average 5-10 year long endeavors. The size of the company or its financial position doesn't phase the FTC. They broke up the Bell monopoly years and years ago and that company was substantially larger and more entrenched then intel.

3. You better damn well believe the U.S. can and will assert jurisdiction over conduct that occurs in foreign countries but has an impact on competition in the U.S. Indeed, the U.S. HAS asserted jurisdiction in antitrust cases involving solely foreign companies. Does it happen often? No. Why? Because the principals of international comity (basically international relations) dictates that not every case should turn into a full blown antitrust crapstorm where the U.S. drags some company through the mud. As someone already mentioned, it would be a political disaster. However, the U.S. frequently asserts jurisdiction when the company or companies involved is/are U.S. based. Why? Because if all it took to escape the U.S. antitrust laws was for U.S. companies to have their meetings overseas, every board of every major company would be sitting pretty somewhere outside the U.S. thinking up ways to make the U.S. consumer its proverbial B%tc#, and the U.S. antitrust laws would not be worth the paper they are printed on.

4. To the guy who told me to learn the facts about oil. Do you even have a clue as to what a loss of 10% of the supply of oil to the U.S. would do? I do. Here's a hint, look at gas prices before and after Katrina. If that happened now, we'll be looking at $5 gas in a heartbeat. You better beleive OPEC and other oil producing nations know they have a foot ready to kick us in the place it hurts most. This sort of power DOES come into play when the U.S. considers whether to assert jurisdiction over Foreign companies. Why else do you think the U.S. has never once sued OPEC for conspiring to restrain trade or unfair business practices?

5. To the guy who pointed out that intel is giving larger discounts to OEM's to use solely intel based systems. This is a good point for AMD, and can be used to show that Intel conpired to monopolize, illegally acted in furtherance of a monopoly, conpired to restrain trade , etc. Heck it could even be considered by a court to constitute price fixing, which in many instances is per se illegal under the U.S. Antitrust laws.



Can US Laws be use for overseas products
By hstewarth on 5/4/2006 10:50:14 AM , Rating: 1
What this basically comes down is question if US laws can be use outside the the US. I think this part of case should be watch very carefully, because it could extreme issue for future legal not just Intel vs AMD?

For example Gas cost 25c in Iraw and middle east, here in US its almost $3. Could they be a monopoly case with Opec.




RE: Can US Laws be use for overseas products
By rushfan2006 on 5/4/2006 10:55:49 AM , Rating: 2
quote:
For example Gas cost 25c in Iraw and middle east, here in US its almost $3. Could they be a monopoly case with Opec.


Actually its 76 cents in Iraq, and about $1.16 (as of last week) in Saudi-land. (all prices in US dollars)

As far as "almost $3" -- some states are already above $3 and have been for at least a few weeks.

But disclaimer here: We Americans shouldn't complain about gas too much in "world wide" forums like the 'net....we STILL have it good. Friggin Brussels its like $6.06 a gallon and I saw one place its like $7 a gallon, but I forget the name...a local news station here listed the cost of gas in countries around the world just last week. And you know what -- aside from the middle east and Korea, even at $3 we are still one of the cheaper places on the planet to buy gas.



RE: Can US Laws be use for overseas products
By hstewarth on 5/4/2006 11:20:03 AM , Rating: 1
I knew it was under $1. Maybe in South America it was 25c - of course prices could have change.

I assume the problem with $6 and $7 is because of taxes which is in US only 40-55c. Which means for US about $1.75 or so is fat - excluding cost to transport here.

But in relationship to this issue with Laws - having antitrust rules go account countries bounds could mean have more issues then just the AMD vs Intel.

Just my opinion - likely anything else you find on the net.


By InternetGeek on 5/4/2006 4:39:28 PM , Rating: 2
In Venezuela a litter costs US$0.045. A US Gallon (Around 4 litters) is US$0.180. This is premium unleaded (Octane-95).

My car uses only a tank per week (around 500km per week) so it means I only spend $93.60 per year in gas.

I believe we are the only country in the word where gasoline is cheaper than mineral bottled water.

*wears flame suit*



RE: Can US Laws be use for overseas products
By Viditor on 5/4/2006 1:45:20 PM , Rating: 2
quote:
We Americans shouldn't complain about gas too much

Too bloody right!
There are countries where gas is cheap (Venezuela, Iraq, etc...), but this is because the government subsidizes the cost. The Governments there actually pay more than the US consumer does...


By InternetGeek on 5/4/2006 4:42:51 PM , Rating: 2
This is true at least for Venezuela. Gasoline is subsidized but not heavily. I'm not sure of the exact amount but when doing the math the amount subsidized becomes "a transfer of earnings" from selling oil to other countries. There is also the fact that for us oil costs $0.