AMD Bites Back, Sues Intel - Intel Suffers in Japan and Governments
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In AMD’s Complaint, there is an interesting comment concerning Intel’s practices in Japan:
“By the end of 2002, AMD had achieved an overall Japanese unit market share of approximately 22%. To reverse the erosion of its business, in 2003 Intel paid Sony multimillion dollar sums, disguised as discounts and promotional support, in exchange for absolute microprocessor exclusivity. Sony abruptly cancelled an AMD Mobile Athlon notebook model. Soon thereafter, it cancelled plans to release AMD Athlon desktop and notebook computers. As a result, AMD’s share of Sony’s business dropped from 23% in 2002 to 8% in 2003, and then to 0%, where it remains today. In proceedings brought by the JFTC, Intel has accepted the JFTC charges of misconduct with respect to Sony.”
The Japanese Fair Trade Commission (JFTC) filed antitrust complaints with Intel even before AMD filed the lawsuit. The JFTC had told Intel that it must not offer company’s exclusionary rebates. Since then, Intel has admitted to using misconduct with respect to Sony, Toshiba, NEC, Fujitsu, and Hitachi.
The charge came with no fine, but a Japanese newspaper published that Intel products were banned in the country for two months. AMD seeks $50 million in Japan and a little more leverage in the processor market. Perhaps if things keep going well for them overseas, it could influence the U.S. case.
Governments have also been trying to look beyond Intel’s product line. Japan, the United States, and France all are making moves to not make purchasing decisions based on a brand or vendor. Governments are deciding they must weight cost and performance without regard to other factors, and they cannot enter into exclusory deals. Previously, France, among other countries, entered into a contract for $643 million. The European Commission ordered that France discontinue single-vendor deals. This could potentially save taxpayers money. And since government is one of the largest single customers, letting AMD into the mix could boost their market share considerably.
It looks like AMD has a fighting chance here, but they have a lot to prove to the court. If current trends are any indication, they should make some progress. Even if the company loses the case, AMD made the news. This sort of case doesn’t go away quickly, and it certainly will get more press as the rivalry gets more bitter. Maybe it will sell a few more AMD64s with a little brand recognition. And at the end of the day, that’s what they really wanted.
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