UK Moves to Improve Processor Competition

In a move to help Intel's competitors, agency issues regulations calling on governments to avoid mention of manufacturer-specific technologies when putting contracts out for bid.

The British government has updated its guidelines for the way UK public authorities buy computer chips—a move designed to help level the playing field for Intel competitors such as AMD.

The publication by the UKs OGC (Office of Government Commerce) of its EU Procurement Guidance document this month follows similar moves by several other EU (European Union) member states as well as the U.S. and Japan. However, governments arent just clarifying the buying process out of the goodness of their hearts; they are attempting to correct a flawed system under which public authorities have routinely specified Intel processors, either directly or indirectly.

Buyers have often specified the Intel brand by name, or a particular feature only found in Intel chips, cutting competitors such as AMD out of the equation and leading to higher costs, critics say. Costs aside, such discrimination is illegal. Last year, for instance, the EC (European Commission) launched a probe into EU member states Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Norway and Sweden, accusing them of favoring Intel in their public procurement procedures.

"Contracting authorities failing to comply with the following rules are at serious risk of incurring domestic legal proceedings and/or EU infraction proceedings," the OGC document warns.

The guidelines, found on the government bodys Web site, urge purchasers to specify what they need in general technical or performance terms, relying on common specifications and generic terms and excluding any reference to brands or manufacturer-specific architectures, technology types or trademarks.

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Purchasers should also refrain from any reference to processor clock-speeds, the OGC said. "Performance of a microprocessor should take into account both clock-rate (MHz) and the number of executable instructions per clock (IPC)," the document states. Contracting authorities may, however, ask that processors achieve a minimum score on an independent benchmark test, the OGC said.

In recent months AMD has begun campaigning for governments to crack down on unfair procurement practices and has met with a sympathetic ear in many countries. This spring Japan, France and the U.S. all issued guidelines requesting public purchasers to stop using brand names and minimum clock-speed requirements. Similar actions have also been taken by Germany, Italy, Sweden, Belgium and Russia in the past two years, according to AMD. The chipmaker cited a 2004 EC study which found that new procurement rules had reduced prices by about 30 percent.

Unfair procurement is a separate issue from AMDs antitrust actions against Intel in the U.S., in which AMD accuses Intel of abusing its market dominance to maintain a monopoly. The EC conducted raids on Intel premises last month as part of its own antitrust investigation, and Japan and South Korean authorities are also investigating Intels business conduct.

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