'Dirty Tricks' or Fair Play By Intel in Rivalry With AMD?: CHIP GIANT BRIBED, BULLIED PC MAKERS, RIVAL AMD CONTENDS
Sunday, August 03, 2008 10:55 AM
Symbols: AMD, FDC, HPQ, INTC, SNE, TECD
By Steve Johnson, San Jose Mercury News, Calif.

Aug. 3--Buried in more than 150 million pages of documents compiled in the legal dispute between Silicon Valley chip makers Advanced Micro Devices and Intel is a remarkable tale of alleged corporate nastiness that could keep the courts and regulatory bodies buzzing for years.

AMD claims its larger rival Intel has used under-the-table payments, threats and other "dirty tricks" to deter computer makers from buying AMD's semiconductors. It says Intel, among other wrongdoings, offered a Tech Data executive a $1 million bribe, browbeat Acer into backing out of an AMD promotion and sold software that crashed computers running AMD chips.

The pages of AMD's suit accuse Intel of so many acts of market intimidation they "read like a chapter from 'The Godfather,' " according to Nathan Brookwood, a research fellow at the Saratoga market consulting firm Insight 64.

Intel insists it has done no more than provide legitimate incentives to use its products and that its business practices have helped keep computer costs low.

Still, the accusations by AMD -- whose stock has plunged in recent months to nearly a 20-year low -- have sparked a worldwide furor. Authorities in Japan, South Korea and Europe also have accused Intel of wrongdoing. Moreover, the Federal Trade Commission and New York's attorney general in recent months have launched investigations into its practices.

How all this plays out could have multibillion-dollar implications for both companies as

well as for consumers, experts say. But determining what really has gone on in the chip industry could prove monumentally daunting.

A special master assigned to the case estimated that the documents dredged up by the suit so far would produce "a pile 137 miles high." Yet depositions with key industry figures are just beginning and the fact-finding could drag on for years.

"This case is on track to be the largest in terms of discovery in the history of civil litigation," said Intel spokesman Chuck Mulloy.

Fights go back to '80s

Santa Clara-based Intel, founded in 1968, and AMD of Sunnyvale, founded a year later, have been squabbling in court over patents and other matters on and off since the early 1980s. But the wrangling intensified in 2000, when AMD began accusing Intel of trying to monopolize the $30-billion-a-year global market for so-called x86 microprocessors, the brainy chips that execute high-speed instructions in various computers and servers.

In 2005, AMD filed suit in a Delaware federal court claiming Intel had used its 80 percent market share "to keep prices high, to stifle competition and to eliminate consumer choice."

One big dispute between the two companies involves so-called discounts or rebates that Intel has given computer makers and others to buy substantial quantities of its chips.


Next Page >>
More Options



Subscribe to Email Alerts rss feed or RSS feeds rss feed for articles from more than 300 contributors and press releases, SEC filings and full text news from thousands of sources.


 
Rate :  Rate this Commentary  


 Number of Comments (0) Post Comment
 
  
Good Rating(+1)    Bad Rating(-1)
No Data Found

 
Enter Symbol
Enter Search String
Bookmark This Article
Email Article

Send this article by email


Recipient's Name
Recipient's E-mail
Your Name
Your E-mail
Related Quotes

 
  Home | Login |Research | Earnings | Scans | Chat Rooms | Charts | Submit Article | Join Blog Network | Contributors | Subscribe to RSS

copryright 2008 all rights reserved