Intel Denies Wrongdoing in Response to AMD Suit

Responding to a rival chip maker's antitrust suit, Intel denied Thursday that its business practices broke any laws and dismissed the claims as "factually incorrect and contradictory." In a 60-page response to the suit by Advanced Micro Devices, Intel said its rival is smaller because of the way it handles its business -- not from any wrongdoing by the world's largest semiconductor company. The far-reaching case, involving PC makers around the world, is expected to take years to litigate.

X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Responding to an antitrust lawsuit filed by a rival computer chip maker, Intel Corp. on Thursday denied its business practices broke any laws and dismissed the claims as “factually incorrect and contradictory.” In a 60-page response to the suit filed by Advanced Micro Devices Inc., Intel said its rival is smaller because of the way it handles its business — not from any wrongdoing by the world’s largest semiconductor company. “AMD has made its own business decisions and choices that have determined its position in the marketplace,” said Intel General Counsel Bruce Sewell. “AMD seeks to instead blame Intel for the many business failures AMD has experienced.” An AMD spokesman did not immediately return a call seeking comment. Intel filed its official response late Thursday with the U.S. District Court in Delaware, where AMD initiated its suit on June 27. The far-reaching case, involving PC makers around the world, is expected to take years to litigate. In its lawsuit, AMD claims its business has been harmed because of Intel’s practice of offering rebates, discounts and other incentives to convince PC makers around the world to use Intel, rather than AMD, chips. Currently, Intel chips that power Windows operating system-based computers make up about 80 percent of worldwide market by unit and 90 percent by revenue. In the suit, AMD claims Intel’s behavior has kept its share low even though its chips are superior. Intel said incentives ultimately lead to lower prices for consumers, and PC makers are free to use AMD chips. Such tactics, Intel said, “are the very practices that the antitrust laws are designed to protect.” “AMD claims that Intel sustains a monopoly that allows it to charge higher prices, but that it does so by lowering prices,” it reads. “This allegation is inherently contradictory. � AMD’s attempt to limit Intel’s ability to discount would only serve to raise prices.” Rather, AMD’s problems stem from its reputation as being an unreliable supplier that failed to properly invest in its business, Intel said. Intel’s filing also noted contradictions between the lawsuit and a statement made by AMD chief executive officer Hector Ruiz. In a recent conference call, Ruiz said the company is in “the strongest position we’ve ever been in.” Moreover, AMD has reported that its factory is running at full capacity. If demand existed, AMD would have difficulty filling the orders, Intel said. And, Intel argued, AMD has recently seen its slice of the market for chips that power servers increase. “Despite its protestations to the contrary, when AMD is able to combine competitive products with reliable supply, the market responds,” according to Intel’s filing. AMD’s small market position stems from its “anemic” investment during the tech downturn. During that time period, Intel poured billions of dollars into building up its capacity, the company said. Intel also said many of the issues raised by AMD in the past and have been resolved. “Under the cover of competition law, AMD seeks to shield itself from competition,” Intel said. ” � AMD’s colorful language and fanciful claims cannot obscure AMD’s goal of shielding AMD from price competition.” The response was filed after the close of markets. Earlier, shares of Intel closed at $25.26, down 46 cents, in trading on the Nasdaq Stock Market. Shares of AMD gained 11 cents, to $20.88, on the New York Stock Exchange. Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Trending Stories

 

Featured Product

Global Briefing

A weekly, curated selection of our international content from around the globe, across the business of law, in-house, regulatory, technology and more, with expert insights from our senior editors.

Learn More

More from ALM

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Privacy Policy

About Us / Contact Us / Site Map / Advertise With Us/ Customer Service / Terms of Service/ FAQ / Privacy Policy

Publications

Law Topics

Rankings

More

Law.com

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.