Intel Seeks to Limit AMD Antitrust Action

Intel has fired back against Advanced Micro Devices, filing court motions to throw out or limit AMD’s antitrust suit against its larger rival.

Intel argues in court filings that the case does not belong in U.S. District Court in Delaware because AMD contends that Intel’s alleged antitrust behavior has harmed it most in overseas sales.

Intel is asking that existing court proceedings be limited to the impact on sales in the United States, which could significantly reduce the scope of the suit.

AMD filed the suit against Intel last year, claiming the leading chipmaker used its market power to convince customers not to do business with AMD by creating exclusive sales agreements with PC makers and others.

“Before subjecting Intel to the burden of defending its foreign business practices in a U.S. Court, AMD must meet the burden of establishing that this court has subject matter jurisdiction over AMD’s foreign commerce claims,” Intel said in briefs filed with the court this week.

The latest court maneuvers come as the case slowly proceeds toward an anticipated trial date in 2008 or beyond.

Made in Germany

Intel’s argument is that the lion’s share of AMD’s complaint and most of the allegations of lost business are related to chips made at AMD’s plants in Germany and sold in Europe and elsewhere overseas. As a result, Intel says, the lawsuit shouldn’t be heard in a U.S. court.

If nothing else, limiting the scope to U.S.-only sales would greatly reduce Intel’s exposure to damages should the company be found guilty of antitrust behavior. Some 70 percent of AMD’s chip sales come from outside the United States.

The briefs filed by Intel represent one of the first offensive moves by the chipmaker since the antitrust saga began.

To date, AMD has largely dominated the headlines surrounding the case, most recently by issuing a subpoena to Microsoft, asking it to preserve and turn over records relating to its decision to support AMD and Intel architecture in the design of its next-generation software products.

The company had previously sought records from more than a dozen technology firms, including Dell, Hewlett-Packard, IBM and Sun Microsystems along with retailers such as Best Buy and Circuit City.

The motions are just a first step, meant to begin the process of focusing the case on the key issues, Intel spokesperson Chuck Mulloy said. He added that Intel is prepared to defend the entire case, but felt it was worthwhile to get a court’s ruling on its scope before it proceeded too far.

Changes Aplenty

The antitrust action is unfolding against a dynamic backdrop in the chip business, with AMD making a hard run at Intel and — for the first time in many years — significantly eating into its market share.

AMD’s share of the market for x86 processors appears to have “increased dramatically” during the first quarter of 2006, noted Insight 64 analyst Nathan Brookwood.

“AMD has increased its dollar share of the market in eleven of the past thirteen quarters,” he told the E-Commerce Times.

The gains are “unprecedented” and “highlight the challenge Intel faces as it brings its next-generation products to market in the second half of the year,” Brookwood concluded.