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AMD and Intel have each filed a series of new documents in federal court as the ongoing legal dispute between the two chip makers moves toward a 2009 court date.
The papers, which were submitted May 1 and made public May 5, were filed as part of the antitrust case that AMD brought against Intel in 2005. The case, which has been assigned to the U.S. District Court in Delaware, has been scheduled for an April 2009 trial date.
AMD has accused Intel of abusing its dominant position in the x86 microprocessor market to stifle competition through a variety of means, including offering deep discounts to vendors to remain exclusive partners, punishing those OEMs that considered using a second chip supplier and giving away products in order to maintain market share.
For the first time, AMD has presented its allegations in a formal summary of its case-a 100-page plus document that details its allegations against Intel and claims to show how the company has used its position with OEMs to dominate the market since IBM introduced the first personal computer with a version of the Intel 8086 processor.
In its counterargument, which also runs over 100 pages, Intel contends that the marketplace is competitive and that AMD’s accusations are an attempt to make up for years of producing inferior products. Each side claims that its x86 microprocessor technology contains the superior innovations needed by PC and server vendors as well as the average consumer.
The filings are culled from between 150 and 200 million pages of documents that have been introduced in the case so far. After reading the summaries, the two judges in the case will determine which witnesses can be deposed, and that will set up the actual trial in 2009. AMD’s attorneys are expected to take depositions throughout the rest of the year and possibly into 2009.
The latest filings offer a glimpse into how AMD plans to present its case before the federal court. In the filings, AMD claims that all of the major OEMs-Hewlett-Packard, Dell, IBM, Acer, Gateway-received special treatment from Intel if the companies bought only Intel processors.
These relationships with vendors formed the base of Intel’s practices and led to AMD’s exclusion from the market place, AMD argues.
If these vendors, or some of the other smaller companies, decided to look at or build PCs or servers with AMD processors, they were punished by Intel, according to AMD. For example, in the late 1990s, Gateway took a serious look at AMD processors and decided to offer a line that used the company’s chips. Then, for reasons that are not clear, Gateway-a longtime exclusive user of Intel chips-dropped AMD.
“Gateway suddenly ‘phased out’ AMD in July 1999, and Gateway abruptly cancelled its launch of a machine based on AMD’s Athlon processor,” according to the documents. (Acer, which now owns Gateway, now uses AMD processors in Gateway PCs.)
How and why Intel would have caused Gateway to do this and what evidence AMD plans to present of this remain unknown.
The public versions of these documents are heavily redacted due to a protection order that the two judges assigned to the case agreed on to protect trade secrets and other proprietary information. In an interview, Chuck Diamond, lead outside counsel for AMD, said Intel has used the protection order to excess in order to shield its sales practices from the public.
Intels Side of the Story
Chuck Mulloy, a spokesperson for Intel, said the redactions in the public documents protect the company’s trade secrets and AMD is trying to use the latest filing to drag as many witnesses into court as possible to provide depositions in the case.
In its own court papers, which are also redacted at points, Intel contends that the chip business is competitive and that AMD and its processors have not provided the technical capabilities required by the world’s top PC and server vendors. AMD has not gained market share due to the marketplace itself and Intel’s ability to deliver products that its vendor partners wanted, Intel argued.
“In an industry with large, powerful customers, whose purchases are often measured in the hundreds of millions, and in some cases billions, of dollars, competition is often bruising,” Intel’s document said. “Both Intel and AMD engage in vigorous persuasion and negotiation to convince customers to align their products with the suppliers’ offerings. In the face of this intense competition, AMD is seeking a rule that would require a successful competitor like Intel to pull its punches and not compete aggressively on price.”
Many of the same arguments against Intel have shown up in various antitrust cases worldwide, including the recent actions by the European Union. Earlier in 2008, the New York Attorney General’s Office opened an investigation into Intel’s practices and cited some of the same business tactics that the chip maker allegedly engaged in against AMD.
The next hearing before Special Master Vincent Poppiti and presiding Judge Joseph Farnan is scheduled for June.