AMD Responds to Intel’s “Acceptance” of The Fair Trade Commission Of Japan’s Ruling that Intel Violated Antimonopoly Act
Intel’s unfair trade practice threatens AMD’s market share
|AMD released the following statement today regarding Intel K.K.’s (“Intel”) acceptance of the Fair Trade Commission of Japan’s (JFTC) March 8, 2005 ruling on its violation of Section 3 of Japan’s Antimonopoly Act:
“It is unfortunate that even when presented with specific – and very disturbing – findings of deliberate and systematic anti-competitive behavior, Intel refuses to face the facts and admit the harm it has caused to competitors and consumers,” said Thomas M. McCoy, AMD executive vice president, legal affairs and chief administrative officer. “Although Intel’s willingness to comply with the JFTC Recommendation is a step in the right direction, it has conspicuously failed to either accept responsibility for its actions or acknowledge that competition is best served when customers and consumers have a choice. The JFTC determined that Intel conditioned its pricing based on customers not doing business with competitors; governments around the world must ensure that such anti-competitive actions are not impacting their markets as well.”
Issued on March 8, 2005, the JFTC Recommendation found that Intel has abused its monopoly power to exclude fair and open competition, thereby violating Section 3 of Japan’s Antimonopoly Act. These findings reveal that Intel used illegal tactics to stop AMD’s increasing market share by imposing limitations on Japanese PC manufacturers. Specifically, the JFTC found that:
The JFTC imposed a number of restrictions on Intel including ending the use of rebates and other funds to illegally distort competition, notifying its customers and educating its employees that it may no longer provide rebates and other funds to Japanese computer manufacturers on conditions that exclude competitors’ CPUs.
Intel had ten days to either comply with or appeal this ruling and requested a two week deadline extension. Intel elected to accept the Recommendation which means that the company will need to alter business practices and implement other remedies immediately to meet the guidance in the Recommendation.
The European Commission recently stated that it is investigating Intel for possible similar anti-competitive business practices in Europe and is cooperating with the Japanese authorities.
AMD’s Position on Fair and Open Competition
AMD stands for fair and open competition and the value and variety competition delivers to consumers. Businesses and consumers should have the freedom to choose from a range of competitive products that come from continuous innovation on a level playing field where everybody plays by the same set of rules. When market forces work, consumers have choice and everyone wins.
|Intel’s anti-competitive measures have caused Advanced Micro Devices (AMD) to experience a falling market share in Japan and other regions worldwide, according to KJ Chou, general manager of AMD Taiwan.
On March 8, the Japan Fair Trade Commission (JFTC) pointed out that Intel had attempted to offer favorable prices to companies that agreed not to use or to limit their use of processors from rivals in Japan. Intel has agreed to follow the recommendations of the JFTC, which warned the chip giant to stop unfair trade practices in the region.
One of the conclusions of the report was that AMD Japan and Transmeta USA saw their combined volume of domestic CPU sales in Japan decline from 24% in 2002 to 11% in 2003.
In the face of these challenges, AMD is putting more effort on strengthening its product line, according to Chou. The K8-compatible CPU segment is expected to be AMD’s major growth driver by the end of the second quarter, Chou said. In addition, AMD’s dual-core processor for the high-end server market is expected around the same time, Chou noted.
JFTC recommendation to Intel [PDF]