Advanced Micro Devices, the world’s No.2 maker of x86 microprocessors, said Tuesday it had filed an antitrust lawsuit against Intel Corp., the world’s largest maker of chips, in U.S. federal district court for the district of Delaware accusing Intel of unfair competition, which limited market share growth of AMD.

“Everywhere in the world, customers deserve freedom of choice and the benefits of innovation -- and these are being stolen away in the microprocessor market,” said Hector Ruiz, AMD chairman of the board, president and chief executive officer. “Whether through higher prices from monopoly profits, fewer choices in the marketplace or barriers to innovation – people from Osaka to Frankfurt to Chicago pay the price in cash every day for Intel’s monopoly abuses.”

The antitrust complaint against Intel Corporation was filed under Section 2 of the Sherman Antitrust Act, Sections 4 and 16 of the Clayton Act, and the California Business and Professions Code. The 48-page complaint explains in detail how Intel has unlawfully maintained its monopoly in the x86 microprocessor market by engaging in worldwide coercion of customers from dealing with AMD. It identifies 38 companies that have been victims of coercion by Intel – including large scale computer-makers, small system-builders, wholesale distributors, and retailers, through seven types of illegality across three continents, AMD claims.

AMD said that Intel’s share of the x86 chip market currently counts for about 80% of worldwide sales by unit volume and 90% by revenue, “giving it entrenched monopoly ownership and super-dominant market power”.

AMD said Intel’s illegal and unfair actions include the following:

• Intel has forced major customers into exclusive or near-exclusive deals;
• Intel has conditioned rebates, allowances and market development funding on customers’ agreement to severely limit or forego entirely purchases from AMD;
• Intel has established a system of discriminatory, retroactive, first-dollar rebates triggered by purchases at such high levels as to have the practical and intended effect of denying customers the freedom to purchase any significant volume of processors from AMD;
• Intel has threatened retaliation against customers introducing AMD computer platforms, particularly in strategic market segments;
• Intel has established and enforced quotas among key retailers effectively requiring them to stock overwhelmingly, if not exclusively, Intel-powered computers, thereby artificially limiting consumer choice;
• It has forced PC makers and technology partners to boycott AMD product launches and promotions;
• Intel has abused its market power by forcing on the industry technical standards and products which have as their central purpose the handicapping of AMD in the marketplace.

This litigation follows a recent ruling from the Fair Trade Commission of Japan (JFTC), which found that Intel abused its monopoly power to exclude fair and open competition, violating Section 3 of Japan’s Antimonopoly Act. These findings reveal that Intel deliberately engaged in prohibited business practices to stop AMD’s increasing market share by imposing limitations on Japanese PC manufacturers. Intel did not dispute these charges. The European Commission has stated that it is pursuing an investigation against Intel for similar possible antitrust violations and is cooperating with the Japanese authorities.

In the lawsuit AMD brings several examples how Intel forced customers not to buy AMD processors, how the chipmaker provided or withdrew marketing or engineering funds from certain PC makers or provided other privileges or disadvantages in order to stop those companies from using AMD chips or participating in AMD events. The Sunnyvale, California-based company says that Intel has attempted to change specification of DDR3 memory pin-out in order to slowdown adoption of the memory type by the main rival. Among other things AMD blames Intel in creating compilers for software that caused AMD chips either to work slower than Intel’s, or to crash.

AMD demands the court to find Intel guilty of all charges and compensate AMD its losses as well as profits caused by Intel’s actions.

“Intel has not yet received any formal word from AMD or the Delaware Court regarding this alleged complaint.  We cannot comment on this matter unless or until we receive and have a chance to review the alleged claims,” an Intel European spokesman told X-bit labs on Tuesday.

Links:

• An Open Letter from Hector Ruiz, AMD Chairman, President and Chief Executive Officer.
• AMD’s Complaint against Intel.