AMD and Intel trade insults over Japanese anti-trust ruling

Posted on 9 Mar 2005 at 10:00

Rivals AMD and Intel have begun a war of words over the recent 'Recommendation' by the Japan's Fair Trade Commission (JFTC) which found that Intel had acted illegally by offering incentives to computer manufacturers if they didn't buy processors from rival companies.

In its ruling the JFTC said that Intel must stop the practice immediately and announce that it intends to pursue different business methods in the future. However, the JFTC refrained from issuing a fine or other penalty at this stage.

In a statement, Intel maintains that its business practices are both fair and lawful. The company is mulling the ruling Recommendation before deciding its next steps.

Intel clearly feels itself to be the injured party in the affair. In a statement Bruce Sewell, the company's vice president and general counsel said 'One of the core principles of competition policy is the notion that such policies should be based on sound economics. There is a broad consensus that competition regulators should only intervene where there is evidence of harm to consumers. It is apparent the JFTC's Recommendation did not sufficiently weigh these important principles.'

On the face of it, this is a curious statement. Intel is not denying that the practice took place, only that it didn't harm consumers. However, monopolists down the ages have argued that predatory pricing is 'good for consumers' as they get a better deal. At least in the short term. It's when the monopolist forces everyone else out of business that things start to get sticky.

The point was made by Sewell's opposite number over at AMD. Thomas M. McCoy, AMD's executive vice president, legal affairs said ' Using market power illegally to limit innovation and, more importantly, consumers' freedom to choose, cannot be tolerated.'

McCoy continued, 'The evidence of harm to consumers is obvious. Efforts by an avowed monopolist to artificially set market shares to exclude competition clearly violates antitrust standards globally.'

Intel has ten days to respond. If we take the statement at face value, the chip giant doesn't seem to be in the mood to meekly comply with the ruling. It would seem that an appeal is the favoured option.

Author: Steve Malone