AMD suit dismissed as 'media campaign'

AMD's high profile suit against Intel alleging anticompetitive practices has been dismissed as "part of a media campaign" attacking the world's largest chip manufacturer, and should not affect corporate buying decisions.

"The AMD filing, which is surprisingly readable for a legal document, seems to have been crafted not only as a legal complaint, but as part of a media campaign. AMD has also run full-page ads in major newspapers outlining its position," said Martin Reynolds, vice president and fellow at Gartner Research.

The case will draw intense media attention, according to the analyst, but is unlikely to have an adverse impact on either companies' operations.

Gartner advised firms to ignore the suit and not make any changes to system procurement plans. "AMD and Intel will not be distracted from their operations, " the analyst stated.

The AMD complaint alleges that Intel is a monopoly, and cites examples of practices that it believes to be illegal for such a monopoly.

AMD alleges that Intel violated US antitrust law by pressuring 38 system manufacturers, including Dell, HP and Sony, to use its microprocessors.

"Intel could argue in response that its market dominance is due to innovation and aggressive capital investment rather than to monopolistic behaviour and that if PC technology did not advance, the market would be dramatically smaller," said Reynolds.

"Some of the allegations involve clear threats outside contractual relationships; the complaint details what it describes as 'old-fashioned threats, intimidation and knee-capping'.

"If true, these seem serious enough to merit action irrespective of Intel's status as a possible monopoly."

Reynolds went on to predict that the lawsuit will probably take years to resolve, but conceded that the pace would be quickened if AMD managed to interest US federal or state authorities in taking up a parallel antitrust case.

"The battle will begin to heat up when AMD tries to engage in the discovery process, which Intel can be expected to vigorously oppose. No company wants lawyers rummaging through its email and other records," he said.