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This week in chips

Advanced Micro Devices has fired off a federal antitrust lawsuit against Intel, claiming that its rival has a monopolistic grip on the PC industry.

As the Supreme Court was making its rulings in the Grokster and Brand X cases, Advanced Micro Devices was firing off a federal antitrust lawsuit against Intel, claiming that its rival has a monopolistic grip on the PC industry.

The suit details alleged scare tactics and coercion that AMD claims Intel imposed on 38 companies, including large-scale computer makers, small system builders, wholesale distributors and retailers.

In its 48-page complaint, AMD alleges that former Compaq Computer CEO Michael Capellas complained that Intel withheld delivery of server chips in 2000. The complaint states that Capellas told AMD he had to stop buying its processors and said "he had a gun to his head." The complaint also states that Gateway executives said their company paid a high price for even its limited AMD dealings. The claim at the time was that Intel had "beaten them into 'guacamole'" in retaliation, the complaint states.

Later in the week, AMD Japan filed suits against Intel's Japanese subsidiary, Intel K.K.. It also launched a marketing campaign against Intel, running full-page ads in newspapers to outline the reasons for its lawsuit and to issue a call to action. The ad, which ran in newspapers from The New York Times to Capitol Hill's Roll Call, broadens AMD's legal fight into a battle for public opinion.

AMD's ad alleges Intel has harmed and curtailed competition in the chip industry, saying that Intel has strong-armed major customers into accepting exclusive deals and threatening retaliation should they do business with AMD. "For most competitive situations, this is just business. But from a monopolist, this is illegal," AMD claims in its ad.


Paul Otellini
CEO, Intel

Intel CEO Paul Otellini defended his company against AMD's new legal attacks. Otellini said his company has been involved in other antitrust suits, has faced similar issues before and expects to come out on top of this one as well.

"Intel has always respected the laws of the countries in which we operate," Otellini said in a statement. "We compete aggressively and fairly to deliver the best value to consumers. This will not change."