unions

An Advanced Micro Devices executive claims that Intel and Apple cut a deal in 2005 that made Intel an exclusive supplier of processors to Apple, preventing AMD from gaining Apple business.

The claim, made in a phone interview with Tom McCoy, AMD's senior vice president of legal affairs, earlier this week, holds that Intel has had a longstanding deal to be Apple's sole supplier of microprocessors. To date, Apple has not used an AMD central processing unit (CPU) in any of its products. Currently, only Intel CPUs populate Apple's laptop, desktop, and server lineups.

This assertion by AMD comes in the wake of the EU decision last week to fine Intel $1.45 billion for violating antitrust legislation. Last week's EU decision centered on whether Intel used illegal tactics to deny processor business to AMD at PC makers.

McCoy said that a deal was struck when Apple moved from the PowerPC (IBM-Motorola) chip architecture to the x86 (Intel-AMD) architecture. The transition was announced by Steve Jobs at the Worldwide Developers Conference in 2005.

"They made a deal when they were porting over from PowerPC to x86 as to how much Intel was willing to pay for that port. My guess is that Intel asked for and won exclusivity in return for the help that they gave Apple to port," McCoy said.

McCoy continued: "That deal will not be exclusive forever and when that exclusivity is over, I'm sure they (Apple) will choose on the merits. We'll have a chance to compete for Apple's business when Apple is ready," he said. Intel denies this allegation.

Though McCoy did not make any direct charge of illegal activity regarding such a deal, the assertion is not that far removed from charges made in the July 2005 AMD complaint against Intel. AMD, in that filing, cited Dell, among other examples of exclusive Intel deals with PC makers. "In its history, Dell has not purchased a single AMD x86 microprocessor despite acknowledging Intel shortcomings and customer clamor for AMD solutions, principally in the server sector...Dell has been and remains Intel-exclusive. According to industry reports, Intel has bought Dell's exclusivity with outright payments and favorable discriminatory pricing and service." (Note: Dell, in 2005, offered no AMD-based products, though it does today.)

Whether the deal is exclusive doesn't in itself constitute a legal argument, according to Joshua D. Wright of the George Mason University School of Law, who has written about the EU decision in a blog, "Truth on the Market." "Under Section 2 of the Sherman Act, a plaintiff must show that the exclusive dealing arrangement harmed competition in the form of higher prices, lower output, or reduced innovation," Wright said, responding to an e-mail query. … Read more

Following the European Union's decision to fine Intel for "illegal" business practices, Nvidia is crying foul too, according to a report.

Nvidia CEO Jen-Hsun Huang said Intel's chip pricing is unfair but added that the graphics chipmaker will not seek antitrust action against Intel, according to a Reuter's report.

This is a beef that Nvidia has had with Intel ever since Nvidia's Ion graphics chipset debuted last year. The competitive backdrop is Intel's longstanding vision of a CPU-centric universe versus Nvidia's creed that graphics processing matters more and more in a multimedia-intensive … Read more

Updated at 12:45 p.m. PDT: adding AMD statement.

The question of whether Intel engages in abusive market behavior has been answered by the European Commission. Or has it?

To recap, the EC said:

"Intel limited consumer choice and stifled innovation by preventing innovative products for which there was a consumer demand from reaching end customers."

And: "Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 central processing units (CPUs) from Intel. Intel also made direct payments to a major retailer on condition it … Read more

Advanced Micro Devices is flying the European Union flag on its home page. A little gloating going on?

And if the image doesn't convey the message, the caption does: "European Commission finds Intel guilty of breaking antitrust laws, harming consumers."

That's not all. AMD's Break Free page is a treasure trove of information on the EU case and Intel's alleged bad behavior. "Read the European Commission's Press Release Detailing its Ruling Against Intel" and "Read the European Commission's Questions and Answers Detailing its Ruling Against Intel"--are a … Read more

Updated on May 14 at 2:40 p.m. PDT with additional comments from AMD.

The chip choices that Dell has made for its business PC line provide some insight into the challenges facing Advanced Micro Devices in the wake of the European Union ruling Wednesday against Intel.

"At this point in time we have one AMD desktop but no AMD notebooks," Darrel Ward, director of product management for Dell's business client product group, said in a phone interview Wednesday on a topic unrelated to the EU case. "If you talk to us a year from … Read more

In a conference call this morning, Intel CEO Paul Otellini responded aggressively to the allegations attached to the $1.45 billion fine levied by the European Union.

The fine was levied because EU regulators determined that Intel had violated antitrust legislation and engaged in anticompetitive practices to exclude competitors from the market for x86 (Intel-compatible) processors, the Commission said in a statement Wednesday.

Otellini began with an opening statement, citing the Commission's allegations of the chipmaker "granting conditional rebates, where the conditions just weren't just volume-based but allegations about exclusive dealings or in one case exclusivity on retail shelves."

"Intel strongly disagrees with this decision. We do not have those kinds of conditions in our contracts. Our contracts are straightforward. They're consistent worldwide and they're volume-based: the more you buy, the less you pay," he said.

Otellini said Intel will appeal the decision. "We intend to appeal this decision to the (EU) Court of First Instance. We believe a significant amount of evidence was either ignored or disregarded or both by the case team that would refute the allegations," he said, adding: "We intend to abide by whatever was written in the decision as we go through the appeal process."

Responding to a question about the evidence that Intel showed to the EU, Otellini said that OEMs (that is, PC and system suppliers) have stated they were no exclusive deals. "There are a number of documents that refute what was claimed here. In some cases, OEMs made statements that they were not exclusive deals and they were not under conditional terms and those documents were not allowed either into the case file or used properly by the case team in making a determination," he said.

He continued: "The process is originating from a single complainant--AMD. None of the customers complained as part of it or joined the complaint," Otellini said. "I don't see any consumer or competitor harm happening here." … Read more

A number of reports say the European Commission will levy a large fine on Intel this week for violating antitrust rules.

The decision to fine the world's largest chipmaker will be handed down on Wednesday, according to Reuters. This action has been expected.

The Commission, part of the European Union, will also order Intel to change the way it provides rebates to computer makers, according to Reuters. On Friday, Commission officials discussed the Intel fine with "national competition authorities," Reuters said.

Intel's only real competition in the worldwide PC processor market is Advanced Micro Devices, which … Read more

Microsoft met a deadline this week to respond to European Commission charges that its inclusion of a browser in Windows violates antitrust laws there.

In January, the European authorities filed a new complaint with a preliminary finding that Microsoft had broken the law by bundling a browser into Windows.

Microsoft's response was not made public and the company did not offer a comment, but it's fair to say the company disagrees with the finding.

The stakes are high. In addition to potential fines, Microsoft has noted in regulatory filings that European authorities may seek to force Microsoft to include rival browsers … Read more

The European Commission is moving toward punitive action against Intel for violating antitrust law, according to reports.

The European Commission has sent to EU member states a draft decision that rules against the world's largest chipmaker, according to reports from Reuters and Bloomberg.

The Commission may deliver a formal decision within weeks, based on past practice, according to Reuters.

In the draft decision, the Commission states that Intel abused its market power in violation of EU antitrust law.

Intel's only real competition in the worldwide PC processor market is Advanced Micro Devices, which sued Intel in 2005 on … Read more