Tuesday, June 28, 2005

Quoted - AMD, Intel, and a really big lawsuit

Back to geekdom for just a bit...

Chipmaker Advanced Micro Devices (AMD) has launched a fairly broad-ranging antitrust lawsuit against Intel.

I know, please try to maintain decorum as you absorb this earth-shattering news. If not for me, then for the sake of the children. Thank you.

But seriously, I've written a press release on the issue. It's called AMD Taking Huge Market Share and Client Gamble With Antitrust Lawsuit, and you can read it here.

I'll post links to responses as they become available.

Pickups from the Agence France Presse wire service: Considering how many news outlets in France have picked up this story, I'm beginning to understand what Jerry Lewis must feel like.

I've also been picked up by an outfit called lowyat.net. They conducted an analysis of the suit, entitled EU raids Intel in Europe, and posted it to their site in PDF and HTML formats. They obtained the source info from the Tom's Hardware piece.


Tony said...

In your analysis you state that Market Subsidies are commonplace, well-understood and an accepted business practice within and beyond the IT industry".

What is your though on whether Intel tied these subsidies any provisions forbidding the use of AMD? The Clayton act (section 14) states that it is illegal to offer subsidies on the condition or understanding that the OEM will not use the goods of a competitor.

tony said...

Sorry - that should be section 3 of the Clayton Act, which corresponds to section 14 of the U.S.C.

"Section 14
Sale, etc., on agreement not to use goods of competitor (Section 3 of the Clayton Act)

It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce."

Carmi said...

Good question, Tony. I'm glad you asked it.

My thoughts are simple: if it can be proven in court that an organization has violated the Clayton Act in this manner, then more power to the plaintiff.

I think we need to separate the two issues here. The first issue: market subsidies are a normal component of business. The second issue: companies may not use them to interfere in the ability of other organizations to pursue business.

One company's violation - hypothetical at this point, since the case has not yet been heard - does not universally render such subsidies outside the bounds of accepted business practice.