Worldwide Antitrust Enforcement in Defense of Fair and Open Competition
Antitrust Enforcement around the World
On August 4, 2010 the FTC and Intel announced that they had reached a proposed settlement of an antitrust enforcement action brought against Intel by the FTC in December 2009. A final decision and order was signed on November 2, 2010.
AMD is gratified that the FTC acted firmly in the interest of American consumers to safeguard the competitive process in the critically important microprocessor and graphics markets. As spelled out in our settlement with Intel, AMD's critical remaining concern was Intel's use of all-or-nothing discounts to deny competitors' access to the marketplace. The FTC's order clearly and firmly prohibits such abuse and guarantees ongoing monitoring of Intel's conduct.
While this development is significant, ongoing vigilance is critical to maintaining open markets. AMD is confident that decisive enforcement actions taken by antitrust authorities around the world will have a positive effect on competition and help ensure that consumer welfare is advanced, and protected.
Intel Settles Shareholder Derivative Litigation
In July 2010, a U.S. federal judge approved a settlement agreement filed by lawyers for Intel Corporation and attorneys representing Intel stockholders. Based on the settlement agreement AMD sees several important takeaways from this stipulated agreement that may be helpful in providing transparency with regard to Intel’s compliance with antitrust laws.
- Intel will eliminate retroactive rebates, absent approval by the head lawyer to its Sales & Marketing Group.
- Absent approval by the head lawyer to Intel’s Sales &Marketing group, all new sales and pricing agreements must be in writing, include standard integration and non-exclusivity causes, and be kept in a centralized repository.
- Intel will form a Compliance Committee that will, among other things, monitor Intel’s compliance with the terms of the AMD settlement and review the effectiveness of Intel’s antitrust compliance policies and procedures annually.
- Intel will create a process to audit accounts to assess compliance with Intel’s antitrust policy.
AMD Settles Civil Antitrust Lawsuit
On November 11, 2009, AMD and Intel settled all then existing antitrust and IP disputes. There are several key components to the settlement agreement:
- Intel has agreed to conform its future conduct to an important set of ground rules intended to define the path to a fair and competitively open market in the microprocessor industry.
- AMD and Intel have agreed to a new patent cross-license agreement that gives AMD broad rights and the freedom to go fabless and utilize any number of AMD selected foundries for unlimited volumes of x86 products.
- GLOBALFOUNDRIES has received an Intel license that allows it to manufacture AMD product and provides it the freedom to operate going forward as an independent, world-class foundry company without any need to remain a subsidiary of AMD.
- Intel has paid AMD $1.25 billion in cash.
Full details regarding the settlement agreement, including rules of business conduct and dispute resolution, may be found in the settlement agreement signed between AMD and Intel.
In May 2009, The European Commission issued its final decision against Intel, stating that Intel violated Article 82 of the European Treaty by abusing its dominant position in the x86 microprocessor market. The ruling imposed a fine of EUR 1.06 billion and required Intel to cease its illegal practices. Intel is appealing the EC ruling.
The EC focused their charges around three types of abuse:
- Intel provided substantial rebates to various OEMs conditional on the OEMs obtaining all or the great majority of their CPU requirements from Intel.
- In a number of instances, Intel made payments in order to induce an OEM to either delay or cancel the launch of a product line incorporating an AMD based CPU.
The EC found that these types of conduct are aimed at excluding AMD, Intel's rival, from the market.
EU Consumer watchdog BEUC voiced its support of the EC actions against Intel on behalf of European consumers. For comprehensive information regarding the EC’s ruling against Intel, we encourage you visit their Intel case-specific Web page here.
The Japanese Fair Trade Commission (JFTC) issued a ruling against Intel in March 2005, finding that the company abused its monopoly power to exclude fair and open competition, in violation of Section 3 of Japan’s Antimonopoly Act – harming Japanese consumers and foreclosing competition in the Japanese market. Intel did not challenge this decision.
The Korean Fair Trade Commission (KFTC) issued a ruling against Intel in June 2008, finding that Intel abused its monopoly by making payments to Korean PC makers that were conditioned on not purchasing competing CPUs from AMD. The KFTC revealed that between 2001 and 2005 Intel offered Samsung Electronics and Trigem Computer combined payments of approximately US$370 million on the condition that those companies boycott AMD. The KFTC ruled that such practices hurt market competition by limiting the choice of local PC makers in selecting business partners, and forced Korean consumers to buy PCs at higher prices. The KFTC fined Intel 26 billion Won and issued a cease and desist order banning payments to Korean PC manufacturers conditioned on boycotting Intel competitors like AMD. The KFTC delivered its final written ruling against Intel on November 7, 2008. Intel appealed the KFTC’s decision, but that appeal was denied in July 2013.