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AMD lays out antitrust strategy

AMD lays out antitrust strategy

Papers are flying in legal offices around the world as a result of AMD's antitrust lawsuit against Intel, which was filed earlier this year.

The case is not expected to come to trial until next year - assuming it isn't settled by then - but lawyers for both sides are formulating arguments as documents and data start to flow from almost 40 hardware industry companies subpoenaed by AMD.

The chipmaker believes Intel unfairly uses its heft as the primary supplier of PC and server processors to exclude AMD from lucrative accounts such as Dell. Intel denies that it forces customers to buy chips solely from Intel, and contends that AMD's inability to break into these accounts has more to do with manufacturing capacity than exclusive deals.

AMD's executive vice-president for legal affairs and chief administrative officer, Thomas McCoy, is directing the company's legal strategy against Intel. He recently sat down with IDG News Service to outline the basic nature of the case against Intel, and provided an early glimpse of the strategy AMD intends to employ at trial. An edited transcript of that conversation follows below.

Intel's legal team was given a similar opportunity to sit down and discuss the case, but a company spokesperson declined the offer. At this time, Intel doesn't want to elaborate on the antitrust case beyond the arguments the company presented in its official answer to AMD's complaint, filed in September.

IDGNS: Where is the line between illegal behaviour and fair competition? When do you cross from fair, tough legal competition to illegal behaviour?

McCoy: Well, it's illegal if you are a monopoly, to use your power to maintain that monopoly. The question typically comes down to what is the benefit to competition structure and consumer welfare that this behaviour alters. Is it pro-competition, is it pro-consumer, or is it the behaviour of a monopoly to maintain monopoly share and monopoly margins?

The initial foundational question is about whether Intel holds monopoly power? That's a lay-down hand for AMD. There's no credible argument about Intel monopoly power in a relative market in the eyes of the court.

IDGNS: What is the standard for a monopoly?

McCoy: The power to control price and control the marketplace, beginning by measuring market share. Intel - with a 90 per cent dollar share in the x86 market - is one of the largest and most entrenched monopolies of this century.

IDGNS: Does the question come down to consumer harm?

McCoy: I think that consumer harm from an economic analysis and policy statement is important in an antitrust case, but that's good for AMD because it's so easy to demonstrate.


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