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New York Attorney General Andrew M. Cuomo  (Source: Groll/AP)
“We intend to stop them" -- New York Attorney General Andrew M. Cuomo

Intel is no stranger to lawsuits. The company was slapped with a $1.45B USD fine by the EU in May of this year for anticompetitive practices. The charges leveled against Intel mainly focused on illegal methods Intel used to keep AMD from gaining in traction in the marketplace.

At the time, EU competition commissioner Neelie Kroes noted that, "[Intel used] used illegal anticompetitive practices to exclude its only competitor and reduce consumers’ choice — and the whole story is about consumers."

The Santa Clara, CA-based company later appealed the ruling with Intel spokesman Chuck Malloy saying, "Our position is that the decision was wrong and we said that from the day it was announced. It was wrong on many levels."

Now it appears that Intel is facing another lawsuit -- this time on its own home soil according to the New York Times. New York attorney general Andrew M. Cuomo is going after Intel this time with a federal antitrust lawsuit. Like the aforementioned EU case, Cuomo asserts that Intel used illegal tactics to stifle AMD.

“Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,” said Cuomo. “Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices.”

The NYT adds that the state of NY's action against Intel could mean that the FTC could step in as well with charges of its own. "These are separate investigations, but it would be very surprising for New York State to go off on its own without being fairly confident the FTC would pursue Intel as well," a person familiar with the situation told the NYT.





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The First Real Evidence for Anti-trust Violations
By Sahrin on 11/4/2009 4:05:42 PM , Rating: 5
The article on cnnmoney.com (http://money.cnn.com/2009/11/04/technology/cuomo_s... lists the first "smoking gun" evidence of anti-trust violations I have seen. An e-mail from a Dell Exec says blatantly and flat-out "If we use AMD, we can expect financial retaliation from Intel to the tune of $500 million" (para).

This is *exactly* what AMD has been alleging all along. Couple that with an internal Intel e-mail that advises a co-worker to "call him because he doesn't want to talk about this over the phone due to anti-trust concerns" (para) means Intel will *NOT* want this to go to trial.

As far as AMD is concerned, Intel's not going to be shut down - and every conviction/fine Intel gets from a governmental agency simply makes AMD's case for anti-trust violation stronger. Remember, because AMD's is a civil suit they only have to convince a jury Intel was even partially cuplable for AMD's struggles (just 10% responsible could add up to tens of billions in damages)...and based on the e-mails (and the recent implication in insider trading), it shouldn't be that hard to paint Intel with the 'greasy monopolist' brush in a courtroom.

This is a banner day for AMD, make no mistake about it.




RE: The First Real Evidence for Anti-trust Violations
By RjBass on 11/4/09, Rating: -1
By monomer on 11/4/2009 7:01:31 PM , Rating: 2
These are completely different cases. The charges against Intel are for monopolistic practices, and have nothing to do with the recent insider trading fiasco.


By weskurtz0081 on 11/4/2009 9:51:25 PM , Rating: 2
Maybe I missed something, but could you show me where the OP said anything about insider trading?


By Shadrack2 on 11/5/2009 12:32:05 PM , Rating: 2
In original post and quoted in his response:

quote:
...and based on the e-mails (and the recent implication in insider trading)


By RjBass on 11/5/2009 7:47:09 PM , Rating: 1
You really can't read, can you?


By Sahrin on 11/4/2009 10:56:51 PM , Rating: 2
You are correct that Mr. Ruiz was implicated, but you are not correct to imply that the two will 'cancel eachother out.' If AMD goes in front of a jury, reads those e-mails and then says "AND they have corrupt execs" - the fact that AMD also had corrupt execs doesn't do anything to help Intel. AMD didn't break any anti-trust laws; and they won't be on trial in the civil suit. Intel will.


By ZmaxDP on 11/5/2009 4:44:52 PM , Rating: 2
You are clearly not a trial lawyer. EVERYONE involved in a trial is on trial in Civil suits. I don't care if you bring hector ruiz's 95 year old mother to the stand, she'll be on trial.


By RjBass on 11/5/2009 7:50:21 PM , Rating: 2
And I guess you have never been in court during a large cival lawsuite. If AMD pulls that card, Intels defense will pull it as well. It will then be null and void, and I am willing to bet that AMD won't even bring that aspect up.


By chunkymonster on 11/6/2009 1:12:06 PM , Rating: 1
You are comparing apples and oranges...apples and oranges...


By monomer on 11/4/2009 7:04:14 PM , Rating: 4
Hector did not "bleed the company for millions." He allegedly let an analyst know about the ATI acquisition before the details became public and is now facing the consequences.

How are these two cases even related?


RE: The First Real Evidence for Anti-trust Violations
By Regs on 11/4/2009 10:12:06 PM , Rating: 2
I thought it was the spin-off of their fabs into the new Global Foundries?


By monomer on 11/5/2009 12:32:02 PM , Rating: 3
Ooops, you're right, Ruiz was implicated for tipping off the analyst about the GloFo spin-off.

What year is it again?


By aj28 on 11/5/2009 8:05:34 PM , Rating: 2
Ruiz predicted that AMD's stock price would soar after news of the spin-off reached the public. In case you missed that period of history, it didn't happen, and nobody bled anybody for any money.

That said, where is your citation of these manufacturing demands they were supposedly experiencing? If you read the article, a lot of this is about planned products being canceled, particularly in the server realm. AMD likely already had the chips lined up, and as evidenced by current stocks of old Opteron chips, I'd be willing to bet they did.

Rule number one isn't getting the product to the customer. First off, the rule is convincing people to invest in your ideas. Money comes before product or even development. You can't build up a microprocessor design and manufacturing company without meaningful investments, and who is going to invest in a company which is clearly the victim of underhanded market tactics on the part of a huge and influential competitor like Intel?

Furthermore, AMD's products were indeed getting to their customers, but mostly in the retail channel where Intel's bribery wasn't as rampant. The vast majority of revenue comes through the OEM channels, and if the manufacturers advertising and delivering the end product to consumers are being bribed to use a competitor's product, how can you fight that? Only in court, but as we've seen the past few years now, that isn't likely to work, much less in a timely enough fashion to save your company.


By JarredWalton on 11/6/2009 5:55:05 PM , Rating: 2
Manufacturing capacity is fixed by building more fabs, which you build because you are utilizing all of your current capacity and selling all of the product. Intel blocked AMD from selling more product, thereby preventing them from gaining the resources to build new fabs that cost BILLIONS each. It's a cycle either way: Intel builds more fabs because they sell more processors. Of course AMD couldn't have supplied all of the CPUs needed by the whole industry with two fabs, but they would have been building additional fabs (and contracting to other companies on parts that didn't need as much precision -- i.e. Sempron) until they had the capacity.


By superPC on 11/4/2009 5:37:58 PM , Rating: 2
correct me if i'm wrong but didn't X86 license (which is own by intel by the way) stipulate that holder of that license should not exceed a set percentage of CPU sales (20% if i remember correctly). i can't give any reference offhand, still trying to find it. if it's true, then no lawsuit can help AMD because the stipulation of X86 license guarantied that AMD will not make more than 20% CPU in the market.


By knutjb on 11/4/2009 6:02:24 PM , Rating: 2
I think what you're referring to was when AMD manufactured Intel's processors. AMD owns the 64 bit license that Intel needs. I don't think they're in too much long term trouble. One can't live without the other, unless you put one out of business...


By Calin on 11/5/2009 1:02:16 AM , Rating: 2
The license terms are not public... AMD considered a victory even the limited part of the licensing agreement they were able to make public so far.


By ajfink on 11/5/2009 3:06:17 AM , Rating: 2
Even if that is true, that section of the agreement would just be ruled anti-competitive and shens in light of the current marketplace.


By knutjb on 11/4/2009 6:18:28 PM , Rating: 2
Glad to see someone has this story in proper context.

No matter how much Intel ends up paying out it can never compensate AMD for the losses it has incurred on development. To connect the dots for those who get it, if you can't fund your R&D you can't get patents for that technology. You might be working on it but your much wealthier competitor will have a significant advantage and still try to put you under with those newly developed patents.

Remember when AMD was working hard on 64 bit processors and commentators wondered why they worked so hard when 64 bit software was years off. Intel must use AMD's patent to be able to run 64 bit OSes. Intel does not like having to be beholden to anyone.


By xRyanCat on 11/4/2009 7:12:59 PM , Rating: 2
But the two are incompatible. AMD and Intel have cross-licensing agreements. AMD licenses the x86 instruction set from Intel and Intel in turn licenses the expandexd x86-64 set from AMD. Both need each other and neither would ever think about openly breaking the agreement just to spite the other.

True though. AMD could not survive without its current licensing agreements with Intel.


By omnicronx on 11/5/2009 12:22:59 AM , Rating: 1
The problem I see is that Intel can still make x86 chips regardless, AMD can't even make use of x64 without an x86 license. The cross licensing agreement you speak of ends in at the end of 2010, so I find the timing of this news to be very weird..


By chunkymonster on 11/6/2009 1:27:37 PM , Rating: 2
quote:
The problem I see is that Intel can still make x86 chips regardless, AMD can't even make use of x64 without an x86 license. The cross licensing agreement you speak of ends in at the end of 2010, so I find the timing of this news to be very weird..


At one time Intel sued to have AMD's x86 license revoked but, at the time of the suit if AMD's license had been revoked, it would have made Intel a sole source provider of x86 processors to the U.S. government, as a result it was (more or less) determined that AMD has carte-blanche on the x86 license.

Also, AMD broke away from making Intel clones with the K5 series processors; because of this, AMD effectively developed their own x86 uArch. And, while AMD still licenses x86 from Intel, there has been enough cross-licensing between the two companies to negate any threats of revoking licensing. For example, the x86-64 extensions built into all Intel processors is licensed from AMD. So, if Intel forced revocation of AMD's x86 license then AMD could force revocation of Intel's X86-64 license, and then where would either company be? The existing license ending in 2010 will end up being a license renewal, at the most.


By knutjb on 11/5/2009 11:32:59 AM , Rating: 2
http://www.nbcbayarea.com/news/local-beat/Intel-Ex...

An Intel executive is caught up in the same insider trading scandal. This has to do with stock trading not a FAB facility and Intel committing anti-trust violations. You don't have evidence linking the FAB to this case, they are not connected.


By hyvonen on 11/5/2009 5:03:51 PM , Rating: 1
Sorry - my bad. That insider trading comment was a response to someone else who was barking about how unethical intel due to that low-level employee insider trading thingy, conveniently forgetting that a very high level employee (=AMDs CEO) was involved in insider trading.

My other points are valid responses, though. NY is the place for AMDs FAB, and that's a likely reason why NY AG would file a bogus suit against intel.


By HrilL on 11/5/2009 6:43:53 PM , Rating: 2
They've already been proven guilty in the European Union and in South Korea. How many other countries need to join the bandwagon?

Got to love the fanbois that think Intel can do no evil.

AMD's exec has nothing to do with this case. What he did has nothing to do with the decades of illegal business Intel has taken part in.


RE: The First Real Evidence for Anti-trust Violations
By B3an on 11/5/2009 7:37:40 AM , Rating: 1
If this was the EU fining Intel. To you yanks it would be because the EU is corrupt, which i always see posted on here with articles regarding that. But if it's in the US, which is far more corrupt anyway, then something like this is perfectly fine and Intel suddenly deserves it.


By LRonaldHubbs on 11/5/2009 9:54:09 AM , Rating: 1
Even ignoring your demonstrated anti-'yanks' bias for a moment, your assumptions are incorrect. The EU ruling was fishy because of the conflict of interest in the EC. This new case in NY is fishy as well for the same reason -- NY state has a vested interest in AMD/GF. It's no more fine now than it was in the EU case.


By BZDTemp on 11/5/2009 10:05:56 AM , Rating: 3
What conflict of interest in the EU?

If you are referring to the AMD factory in Germany then I think you should remember that Ireland has the biggest Intel factory outside of the US. Plus while both Intel and AMD are big companies they are not really that big considering the EU is union of almost 500 million people. Neither of the two companies has a size which compares much to the really big companies.


By HrilL on 11/5/2009 6:50:44 PM , Rating: 2
Lets not forget the South Korean ruling as well. Intel simply acted illegally and now they need to pay up.

I hope AMD eventually takes them to Civil court and gets the money they deserve. Intel probably robbed more then 20 billion of potential profit from AMD.

This activity went on for years and finally came out of the closet when people actually realized that AMD had the best CPU on the market and almost none of the major OMEs were selling them.


"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser
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